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6  43Zbw 

1914 


UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


DEC  2       1t14 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

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http://www.archive.org/details/benderswarrevenuOOunitiala 


BEIsriDER'S 

WAR  REVENUE  LAW 
19  I  4. 

AN  ACT  TO  INCREASE  THE  INTERNAL   REVENUE. 

AND  FOR  OTHER  PURPOSES 

Approved  October  22,  1914 

ANNOTATED 

WITH  REFERENCE  TO  EARLIER  ACTS  AND 
TO  OTHER  EXTANT  LAWS 

TABLE  OF  CASES,  INDEX.  ETC. 

BY  THE  PUBLISHER'S  EDITORIAL  STAFF. 


ALBANY,  N.  Y. 

MATTHEW  BENDER  &  CO. 

1914 


COPTBIGHT,    1914, 

By  MATTHEW  BENDER  &  CO. 


T 


William   Boyd  Printing   Co.,   Albany,    N.  Y. 


PREFACE. 

EXCUSE  IF  NOT  JUSTIFICATION 


**  The  War  Revenue  Act  has 
been  especially  productive  of 
doubtful  questions." — Report  of 
Atty.  Gen.,  1898,  p.  iii. 

According  to  the  latest  official 
record,  based  upon  the  figures  of 
the  Department  of  Justice,  there 
were  4,431  cases  on  Internal  Rev- 
enue Law  pending  in  the  Federal 
courts.  (Report  of  Commissioner 
for  1913,  p.  18.) 

The  new  Act  repeals  nothing 
and  adds  or  revives  much  statute 
law — much  of  the  very  sort  of 
thing  in  the  way  of  hasty  legis- 
lation which  makes  for  litigation, 
as  well  as  administrative  diffi- 
culty. 

[ill] 


75G059 


TABLE  OF  CONTENTS. 


Page 

Preface iii 

Introductory,  Historical  and  General vii 

Table  of  U.  S.  Internal  Revenue  Statutes xv 

Other  Internal  Revenue  Taxes  in  force xxi 

Act  of  October  22,  1914 1-124 

Beer,  etc 1,  2 

Wines,  etc 4,  16 

Special  taxes 18,  22,  45 

Tobacco  mfrs.,  etc 39,  43 

Adhesive  stamps 46 

Schedule  A.,  documentary  stamps 80,  89 

Schedule  B.,  mercantile  stamps 71,  106 

Other  laws  made  applicable 110 

Assessment  and  collection Ill 

Penalties 114 

Protest  and  reclamation 117 

Construction  of  laws 119 

Taking  effect 124 

Biographical  JSTotes 129 

Table  of  Taxes 135 

Table  of  Cases 143 

Condensed  catch  line  index  to  the  Act 161 

Index 167 

[V] 


INTRODUCTORY   AND   GENERAL. 


The  Internal  Revenue  Act  of  1914,  Act  of  Octo- 
l)er  22,  1914,  will  doubtless  commonly  be  referred  to 
as  a  War  Tax,  although  it  is  not  technically  such 
by  its  title.  It  is  rather  a  rule-of-thumb  expedient 
for  raising  needed  money  than  a  carefully  devised 
instrument  of  scientific  finance.  The  very  use  of 
the  word  'Vwar,"  in  and  out  of  Congress,  implies 
that,  whereas  under  normal  conditions  other  sources 
of  revenue,  such  as  the  tariff,  are  preferable,  a  state 
of  war  may  so  reduce  foreign  trade  and  customs 
duties  as  to  necessitate  a  resort  to  additional  internal 
revenue  measures.  We  experienced  this  in  1813,  in 
1861,  in  1898,  and  now  again  (though  the  present 
war  is  not  our  own),  in  1914. 

In  a  sense,  excise  and  stamp  taxes  are  more  bur- 
densome and  annoying  than  tariff  duties ;  and  memo- 
ries and  traditions  of  abuses  incident  to  crude, 
primitive  excise  systems  partly  explain  this  feeling.^ 

1.  Even  in  Hamilton's  day  the  pie "     .     .     .     "  would  convulse 

opposition    to    excise    was    more  the     government;     let     loose     a 

traditional  than  rational.    There  swarm  of  harpits  who,  under  the 

was,    perhaps,    an    economic    ex-  denomination  of  revenue  officers, 

planation  of  the  Whisky   Rebel-  will    range    the    country,    prying 

lion    and    some    other    forms    of  into    everyman's    house    and    af- 

opposition.     We  now  smile,  how-  fairs,   and,   like   the  Macedonian 

ever,   at    the    talk    in    the   early  phalanx,    bear    down    all    before 

Congress  about  internal  revenue  them "     .     .     .     "  grog,  a  neces- 

taxes  per  se  being,  "  the  horror  sary   article   of   drink  "... 

of  all  free  states "     .    .    .    "  hos-  "  a    shirt    sljall    not    be    washed 

tile  to  the  liberties  of  the  peo-  without  an  excise,"  etc.     It  has 

[vli] 


Viii  INTRODUCTORY  AND  GENERAIi. 

They  are,  therefore,  later  applied  in  times  of  need^ 
and  earlier  abandoned  when  the  financial  stress  is 
relaxed.  Yet  they  fall,  for  the  most  part,  upon 
things  which  are  not  vital  necessaries,  and  they  are 
in  fact  rather  irritating  to  the  prosperous  than  bur- 
densome to  the  poor. 

The  Federal  Government  long  ago  learned  the 
value  of  such  taxes  as  the  most  readily  available 
means  of  supplying  an  extraordinary  need  in  an 
emergency.^  And,  while  we  are  as  yet  spared  the 
necessity  of  taxing  nearly  everything  nearly  all  the 
time,  as  is  true  of  some  other  lands,  our  people  are 
now  familiar  with  the  system  and  fairly  persuaded 
of  its  usefulness.  The  general  scheme  has  been  per- 
manently established  since  1862  and  furnishes  the 
administrative  means  of  collecting  an  increased 
revenue  in  any  emergency.  It  is  clearly  a  good  thing 
to  have,  and  the  people  will  not  object,  if  it  is  not 
used  too  much.  The  extended  schedules^  of  the 
civil  war  period,  which  produced  four  times  as 
much  revenue  in  a  single  year  as  the  tariff,  were 

always  been  the  way  of  politicians  sought  to  re-enforce  the  import 

to    call    a   soap   tax    a   "  tax   on  duties   and   to   prepare    the  way 

cleanliness,"  and   a  paper  tax  a  for  collecting  a  revenue  in  time 

"  tax  on  knowledge."     The  Con-  of  war,   when   the  usual   sources 

gressional  debates  on  the  present  of  taxation  should  become  dry." 

Act,  aside  from  a  sensational  ef-  Bolles,  Financial  History  of  the 

fort  to  complicate  the  matter  by  U.   S.,  1789-1860,  p.  124. 
admixing  the  bad  "  cotton  situ-  2.  The  revenue  measures  of  the 

ation,"    turned    largely    on    the  civil  war  period  were  so  complex 

partisan  political  significance  of  that     Congress     was     sometimes 

adopting    one    rather    than    an-  driven   to   passing   a   special   ap- 

other  of  the  available  means  of  propriation  to  cover  the  prepara- 

obtaining  needed  public  funds.  tion   of  an  index  for  the  use  of 

1.  "  The  excise  was  part  of  the  members.     15  Stat.  237. 
system      by      which      Hamilton 


INTRODUCTORY  AND  GENERAL. 


IX 


rapidly  narrowed  until  the  generation  of  the 
Spanish  war  was  almost  surprised  to  learn  that  in- 
ternal revenue  might  be  made  to  include  other  items 
than  liquors  and  tobacco.  The  War  Tax  of  1898 
was  essentially  an  adoption  and  rough  adaptation 
of  some  of  the  features  of  earlier  acts.  It  served 
its  purpose  and  was,  for  the  most  part,  repealed  in 
1902.  Congress,  facing  a  new  crisis,  induced  or  at 
least  threatened  by  a  general  war  in  Europe,  has 
evidently  and  correctly  concluded  that  the  American 
people  no  longer  consider  reasonable  internal  taxes 
'*  infernal." 

In  each  instance  of  the  passage  of  such  a  measure 
it  has  been  promised  to  be  temporary,  and  in  each 
instance  the  promise  has  been  kept.  The  present 
Act  itself  fixes  December  31,  1915,  as  the  date  when 
the  emergency  taxes  shall  cease.  They  will  be 
acquiesced  in,  if  for  no  better  reason  than  a  dread 
of  possible  alternatives  of  greater  probable  oppres- 
siveness.^ 

Our  so-called  war  taxes  certainly  do  not  *'  beat 
the  Dutch."    The  whole  scheme,  as  a  system,  had 


1.  It  is  interesting  to  note 
that,  as  long  ago  as  1888,  the 
present  executive,  Woodrow  Wil- 
son, wrote  as  follows :  "  The 
people  ought  to  be  made  to  feel 
their  fiscal  policy  all  the  time; 
otherwise  they  will  never  give 
regular  or  adequate  heed  to  it. 
And  there  would  seem  to  be  no 
room  for  doubt  that  the  country 
feels  the  whiskey  and  tobacco 
license  tax  much  more  than  it 
feels  the  duties  on  imports.     It 


shows  consciousness  of  the  one, 
habitual  unconsciousness  of  the 
other.  These  license  taxes,  then, 
are  the  best  indirect  taxes  that 
can  be  laid,  for  a  double  reason; 
they  are  taxes  which  the  people 
— or  at  any  rate  a  .  .  .  part 
of  the  people  feel  that  they  are 
paying;  and  they  fall  upon  arti- 
cles of  luxury,  not  upon  articles 
of  necessity."  The  National  Rev- 
enues, edited  by  Albert  Shaw, 
1888,  p.  109. 


X  INTRODUCTORY  AND  GENERAL. 

its  origin  in  Holland,  where  the  powerful  merchants^ 
to  lighten  the  burden  of  direct  taxes  on  their  own 
capital,  devised  methods  of  indirect  taxation  or  ex- 
cise as  the  best  means  of  scattieriug  the  weight.  The 
Stamp  Tax  adopted  in  1624  is  said  to  have  been  the 
winner  of  a  prize  contest  which  w^as  publicly  adver- 
tised as  a  method  of  accelerating  inventive  genius 
in  the  field  of  finance.  The  civil  wars  induced  Eng- 
land to  try  some  features  of  the  excise  plan,  and  a 
general  stamp  tax  was  imposed  in  1694.  The  Stamp 
Act  of  1765  helped  to  precipitate  the  American  Revo- 
lution. And  several  of  the  early  English  Acts  are 
of  interest,  in  that  our  legislators  have  naturally 
looked  first  to  them  for  practical  precedents.  But, 
as  revenue  enactments  neither  involve  nor  illustrate 
many  scientific  principles,  either  of  law  or  of  eco- 
nomics, there  is  little  to  be  gained  for  our  present 
purposes  by  examining  foreign  analogies. 

The  Act  of  1914  is  so  substantially  a  re-enactment, 
though  with  many  omissions,  additions  and  altera- 
tions, of  the  Act  of  1898;  and  this  emergency  legisla- 
tion is  to  such  extent  a  thing  apart  from  the  main 
and  relatively  permanent  body  of  internal  revenue 
law,  that  it  will  best  and  most  promptly  serve  the 
needs  of  the  legal  profession  and  the  public  to  have 
a  manual  specifically  devoted  to  these  temporary 
measures,  with  appropriate  reference  to  the  perman- 
ent system,  which  has  its  own  literature,  and  to  the 
Act  of  1898.  The  present  book  covers  more  par- 
ticularly the  special  or  license  taxes,  the  stamp  tax 
and  other  features  of  the  emergency  legislation,  with 


INTRODUCTORY  AND  GENERAL.  xi 

references  to  the  general  provisions  which  are  ap- 
plicable from  the  Revised  Statutes  and  other  laws. 
The  '^  world  situation  "  is  such  that,  as  was  inti- 
mated in  the  congressional  debates  on  the  Act,  not 
only  may  these  emergency  taxes  be  extended,  but 
further  features  of  earlier  excise  legislation  may 
have  to  be  revived.  In  view  of  this,  as  well  as  be- 
cause it  is  generally  illustrative,  some  of  the  relevant 
older  material  is  retained  in  this  book  in  a  condensed 
form. 

There  should  be  less  uncertainty  in  applying  the 
new  law  than  in  1898,  even  where  points  in  question 
have  not  been  judicially  passed  upon.  For  there  is 
now  available  a  mass  of  relatively  recent  interpreta- 
tion which  took  definite  shape  after  the  initial  con- 
fusion of  re-applying  (1898)  a  system  long  unused. 
A  great  many  matters  have  been  through  the  courts, 
and  even  the  administrative  precedents  under  the 
Act  of  1898  will  doubtless  be  generally  followed  by 
the  department  as  to  the  re-enacted  and  analogous 
provisions. 

Although  departmental  rulings^  do  not  bind,  nor 

1.  The  Commissioner's  rulings,  Act  of  1898  were  issued:  Vol. 
in  correspondence  with  inquirers  I  in  January,  1899  (Treas.  Dept. 
or  collectors,  or  in  special  or  gen-  Document  No.  2089,  reprint  with 
eral  circulars,  are  printed  in  the  appendix)  ;  Vol.  II  in  January, 
periodic  publication  of  Treasury  1900  (Doc.  No.  2168,  with  ap- 
Decisions.  To  make  these  rul-  pendix),  and  Vol.  Ill  in  Janu- 
ings,  or  such  of  them  as  continue  ary,  1901,  covering  1900,  and  be- 
in  force,  more  accessible  and  con-  ginning  the  numbering  again  at 
venient,  the  Department  from  Xo.  1.  (Doc.  No.  2217.) 
time  to  time  issues  general  cir-  The  compilations  include  the 
culars  and  even  fuller  compila-  general  circulars  and  are  topi- 
tions.  Three  volumes  of  Com-  oally  indexed.  A  new  oflScial  edi- 
pilations  of  Decisions  under  the  tion,  or  a  similar  circular,  will 


■yii  INTRODUCTORY  AND  GENERAL. 

even  always  guide,  the  courts,  they  are  authorita- 
tive and  cannot  be  over  ruled  by  any  other  executive 
officer.  They  must  be  complied  with  before  appeal 
can  be  had  to  a  court.  T.  D.  20459,  Dec.  22,  1898. 
Much  needless  trouble  results  from  futile  attempts 
to  avoid  a  tax  which  has  been  imposed  and  insisted 
upon  by  the  revenue  officers.  There  are  provisions 
for  correction  and  for  refund;  and,  where  it  is  im- 
practicable to  procure,  upon  courteous  application, 
an  acceptable  ruling  within  the  penalty  time  limit, 
it  is  better  to  pay  the  tax  under  protest  and  there- 
after apply  for  refund  and,  if  refused,  appeal  to  the 
courts.  R.  S.,  <^  3226.  "  The  idea  that  every  tax- 
payer is  entitled  to  the  delays  of  litigation  is  un- 
reason." Swayne,  J.,  in  (1880)  Springer  v.  U.  S., 
102  U.  S.  586,  594;  26  L.  Ed.  253. 

*  *  It  is  a  general  and  just  principle  of  law  *  *  * 
that,  where  a  taxpayer  insists  upon  relief,  he  should 
be  required  to  settle  the  amount  fairly  due  from 
him,  whether  the  proper  technical  steps  have  been 
taken  or  not,  before  any  relief  is  granted  to  him." 
(1900)  Eobards  v.  Franks,  103  Fed.  Rep.  276,  citing 
(1875)  State  Railroad  Tax  Cases,  92  U.  S.  575,  23 
L.  Ed.  663. 

*'  No  suit  for  the  purpose  of  restraining  the  as- 

doubtless  be  issued  by  the  Treas-  the  earlier  period,  1864-1898,  was 

ury   Department,   covering   ques-  issued    in    1906    as    Tres.    Dept. 

tions  which  are  sure  to  arise  in  Doc.  No.  2438.     This  period  had 

applying  the  present  law.     These  been    reported    in    the    Internal 

rulings   are  generally  cited,  "  T.  Revenue  Record   (which  was  not 

D."    (Treasury   Decision).  published  after  Dec,  1897). 
A   digest   by  Yerkes,  covering 


INTRODUCTORY  AND  GENERAL.  xUi 

sessment  or  collection  of  any  tax  shall  be  maintained 
in  any  court."    E.  S.  3224. 

(1870)  Pullan  v.  Kinsinger,  2  Abb.  U.  S.  94;  (1874)  U.  S.  v. 
Black,  11  Blatchf.  U.  S.  543,  128  U.  S.  40;  (1883)  Snyder  v,  Marks, 
109  U.  S.  189,  27  L.  Ed.  901;  (1881)  U.  S.  v.  Savings  Bank,  104 
U.  S.  728,  26  L.  Ed.  908. 


Collection  of  a  State  license  tax  cannot  be  stayed 
by  injunction,  even  if  the  tax  is  discriminatory,  ex- 
tortionate and  illegal.  It  should  be  paid  and  the 
proper  remedy  sought.  (1904)  West.  Un.  Tel.  v. 
Winnsboro,  71  S.  C.  231. 

As  to  the  value  and  force  of  administrative  rul- 
ings, see:  (1890)  Schell's  Executors  v.  Fauche,  138 
U.  S.  562,  572  (tariff).  ''  In  all  cases  of  ambiguity 
the  contemporaneous  construction,  not  only  of  the 
courts,  but  of  the  departments,  and  even  of  the  offi- 
cials whose  duties  it  is  to  carry  the  laws  into  effect, 
is  universally  held  to  be  controlling. "    30  L.  Ed.  627. 

See  also  (1886)  U.  S.  v.  Hill,  120  U.  S.  169,  30  L.  Ed.  627 
(naturalization  fees) ;  (1901)  Fairbank  v.  U.  S.,  181  U.  S.  283,  308, 
45  L.  Ed.  862;  (1901)  McClain  v.  Penna,  etc.,  Co.,  108  Fed.  Rep. 
618,  620;  (1902)  McNally  v.  Field,  119  Fed.  Rep.  445,  448;  (1904) 
U.  S.  V.  Cole,  134  Fed.  Rep.  697;  (1903)  Wheaton  v,  Weston  & 
Co.,  128  Fed.  Rep.  151,  153,  where  the  court  "  regrets  to  be  ob- 
liged to  differ  with"  an  attorney-general;  (1890)  St.  Paul,  etc., 
Ry.  Co.  V.  Phelps,  137  U.  S.  528,  34  L.  Ed.  767  (land  grants); 
(1890)  Merritt  v.  Cameron,  137  U.  S.  542,  34  L.  Ed.  772;  (1874) 
Smythe  v.  Flske,  23  Wall.  374,  382  (tariff). 

In  an  early  case  the  court  found  the  commissioner 
too  ready  to  rule  both  ways,  and,  in  determining 
what  the  law  actually  was,  gave  little  weight  to  such 


xiv  INTRODUCTORY  AND  GENERAL. 

rulings.  (1867)  Cardinel  v.  Smith,  Deady  U.  S.,  197, 
204. 

See  notes  on  Construction  under  §  23,  post. 

As  to  whether  a  ''  ruling  "  might  estop  the  gov- 
ernment where,  without  wrong  intent,  it  has  been 
relied  on  by  a  person  proceeded  against: 

See  (1904)  Christie-Street  Co.  v.  U.  S.,  129  Fed.  Rep.  506. 
See  this  case  cited  and  quoted  elsewhere.  And  see  (1871) 
HIrsh  V.  Commonwealth  (Va.),  21  Gratt.  785,  Department  regu- 
lations may  have  the  force  of  law;  (1895)  In  re  Huttman,  70 
Fed.  Rep.  699  (divulging  facts  from  license  applications) ;  (1879) 
Ex  parte  Reed,  100  U.  S.  13,  25  L.  Ed.  538,  (navy) ;  see  (1901) 
Spreckels  v.  McClain,  109  Fed.  Rep.  76;  (1902)  113  Fed.  Rep. 
244.  But  not  defeat  the  law;  (1877)  U.  S.  v.  200  Barrels,  95  U. 
S.  571,  24  L.  Ed.  491;  (1882)  Campbell  v.  U.  S.,  107  U.  S.  407, 
410,  27  L.  Ed.  592  (exporter's  drawback) ;  (1891)  U.  S.  v.  Eaton, 
.144  U.  S.  677,  686,  36  L.  Ed.  591  (oleomargarine) ;  (1912)  Marks 
V.  U.  S.,  196  Fed.  Rep.  476,  479  (opium  case:  "The  treasury 
department  cannot  repeal  an  Act  of  Congress ") ;  see  (1886) 
U.  S.  v.  Symonds,  120  U.  S.  46,  30  L.  Ed.  557  (navy) ;  (1896)  In 
re  Kollock,  165  U.  S.  526,  41  L.  Ed.  813  (oleomargarine). 

The  secretary  of  the  treasury  has  the  power  to  make  regula- 
tions (R.  S.  §  161),  and  a  regulation  is  a  proper  one  which  for- 
bids a  collector  to  produce  official  records  (distillers'  reports) 
in  a  State  court.  (1900)  Boske  v.  Comingore,  177  U.  S.  459, 
affirming  (1899)  96  Fed.  Rep.  552;  (1903)  In  re  Lamberton,  124 
Fed.  Rep.  446.  R.  S.  §  3204,  amended  by  June  21,  1906,  requires 
the  collector  to  certify  certain  records  to  local  prosecuting 
officers. 


GENERAL  TABLE  OF  STATUTES. 


The  development  of  the  Internal  Eevenue  system 
and  legislation  in  the  U.  S.  may  be  traced  through 
the  statutes,  as  follows: 

March  3,  1791,  ch.  15,  1  Stat.  199. 

Excise  on  spirits. 
June  5,  1794,  ch.  45,  1  Stat.  373. 

Internal  duties  on  carriages  for  persons. 
May  28,  1796,  ch.  37.  1  Stat.  478. 

Increasing  carriage  duties. 
July  6,  1797,  ch.  11,  1  Stat.  527. 

Stamp  tax  on  documents. 
December  15,  1797,  ch.  1,  1  Stat.  536. 

Postponing  stamp  tax  of  1797. 
March  19,  1798,  ch.  20,  1  Stat.  545. 

Amending  stamp  tax  of  1797.  | 

April  7,  1798,  ch.  25,  1  Stat.  547. 

Extending  law  of  1794. 
July  14,  1798,  ch.  75,  1  Stat.  597. 

Direct  tax  on  dwellings  and  slaves.     See  note,  1  Stat.  580, 

for  list  of  direct  tax  acts. 
February  28,  1799,  ch.  17,  1  Stat.  622. 

Amending  stamp  tax  of  1797. 
April  23,  1800,  ch.  31,  2  Stat.  40. 

Establishing  a  general  stamp  office. 
March  3,  1801,  ch.  19,  2  Stat.  109. 

Amending  Act  of  1800. 
April  6,  1802,  ch.  19,  2  Stat.  148. 

Repealing  internal  taxes. 
July  22,  1813,  ch.  16,  3  Stat.  22. 

Method  of  collecting  direct  and  internal  taxes. 
July  24,  1813,  ch.  22,  3  Stat.  39. 

Establishes  office  of  commissioner  of  Internal  revenue, 
[xv] 


XVi  GENERAL   TABLE   OF   STATUTES. 

July  24,  1813,  ch.  24,  3  Stat.  40. 

Carriage  tax. 
July  24,  1813,  ch.  25,  3  Stat.  42. 

Distillers. 
July  24,  1813,  ch.  26,  3  Stat.  44. 

Auction  sales. 
August  2,  1813,  ch.  37,  3  Stat.  53. 

Direct  tax. 
August  2,  1813,  ch.  39,  3  Stat.  72. 

License  tax  on  retail  merchants,  liquor  dealers,  etc. 
August  2,  1813,  ch.  53,  3  Stat.  77. 

Stamp  tax  on  notes,  bills,  etc. 
August  2,  1813,  ch.  56,  3  Stat.  82. 

Further  details  as  to  method  of  collection. 
December  10,  1814,  ch.  11,  3  Stat.  148. 

Amending  stamp  tax  of  1813. 
December  15,  1814,  ch.  12,  3  Stat.  148. 

New  rates  on  carriages. 
December  21,  1814,  ch.  15,  3  Stat.  152, 

Spirits  and  licenses. 
December  23,  1814,  ch.  16,  3  Stat.  159. 

Auctions,  licenses,  etc. 
January  18,  1815,  ch.  22,  3  Stat.  180,  186. 

Manufactured  goods,  furniture,  etc. 
February  27,  1815,  ch.  61,  3  Stat.  217. 

Gold  and  silver  plate,  etc. 
March  3,  1815,  ch.  91,  3  Stat.  230. 

Amending  Act  of  1815  as  to  furniture,  watches,  etc. 
February  22,  1816,  ch.  18,  3  Stat.  254. 

Repealing  tax  on  plate  and  jewelry. 
April  9,  1816,  ch.  41,  3  Stat.  264. 

Repealing  tax  on  furniture  and  watches. 
April  19,  1816,  ch.  58,  3  Stat.  291. 

Amending  spirits  license  Act  of    1814. 
December  23,  1817,  ch.  1,  3  Stat.  401. 

To  abolish  internal  duties. 
March  3,  1823,  ch.  55,  3  Stat.  779. 

To  permit  validating  by  post  payment  deeds,  etc. 
August  5,  1861,  ch.  45,  12  Stat.  292. 

Tariff  and  direct  tax,  including  income. 


GENERAL  TABLE  OF  STATUTES.  xviS 

July  1,  1862,  ch.  119,  12  Stat.  432. 

General    internal    revenue    act;    provides    for    department;- 

basis  of  all  later  legislation  on  the  subject. 
March  3,  1863,  ch.  74,  12  Stat.  713,  737. 

Amends  1862  Act. 
March  7,  1864,  ch.  20,  13  Stat.  14. 

Amends  1862  Act. 
June  30,  1864,  ch.  173,  13  Stat.  223. 

Complete  general  Act,  elaborating  Act  of  1862. 
July  4,  1864,  13  Stat.  417. 

Joint  resolution;  special  income. 
December  22,  1864.  13  Stat.  420. 

Amends  general  Act. 
March  3,  1865,  ch.  78,  13  Stat.  469. 

Amends  last  Act. 
March  10,  1866,  ch.  15,  14  Stat.  4. 

Interprets  general  Act. 
July  13,  1866,  ch.  184,  14  Stat.  98. 

First  general  Act  to  reduce;   special  taxes  substituted  for 

licenses. 
March  2,  1867,  ch.  169,  14  Stat.  471. 

Changes  and  reductions. 
March  31,  1868,  15  Stat.  58. 

Reductions. 
July  20.  1868,  ch.  186,  15  Stat.  125. 

New  Act  covering  spirits,  tobacco,  etc. 
July  14,  1870,  ch.  255,  16  Stat.  256. 

Repeals  certain  occupation  taxes,  certain  stamp  taxes,  etc^ 
March  3,  1871,  16  Stat.  601. 

Resolution  for  reduction. 
June  6,  1872,  ch.  315,  17  Stat.  230. 

Reduction  of  taxes. 
December  24,  1872,  ch.  13,  17  Stat.  401. 

Reduction  of  department. 
March  3,  1873,  17  Stat.  621. 

A  compilation  of  Internal  Revenue  Laws. 
February  8,  1875,  ch.  36,  18  Stat.  310. 

Tax  on  State  bank  circulation. 
March  1,  1879,  ch.  125,  20  Stat.  327. 

Numerous  amendments  of  Revised  Statutes. 


JCViii  GENERAL   TABLE    OF   STATUTES. 

March  3,  1883,  ch.  121,  22  Stat.  488. 

To  reduce;  and  to  repeal  tax  on  checks,  matches,  etc. 
-August  2,  1886,  ch.  840,  24  Stat.  209. 

Oleomargarine. 
October  1,  1890,  26  Stat.  567. 

McKinley  bill:  opium  tax. 
-August  28,  1894,  28  Stat.  509. 

Wilson  bill :  income  tax  (unconstitutional) :  tax  on  playing 

cards. 
June  6,  1896,  ch.  337,  29  Stat.  253. 

Filled  cheese. 
June  13,  1898,  ch.  448,  30  Stat.  448. 

Spanish  war  tax. 
April  12,  1900,  ch.  191,  31  Stat.  77. 

Foraker  Act,  Porto  Rico. 
April  30,  1900,  ch.  339,  31  Stat.  141. 

Hawaii. 
-May  12,  1900,  ch.  393,  31  Stat.  177. 

Redemption  spoiled  stamps. 
"March  2,  1901,  ch.  806,  31  Stat.  938. 

Amending  Act  of  1898;  reduction  and  repeal. 
July  25,  1901,  32  Stat.  Pt.  2,  p.  1983. 

Executive  proclamation  under  Foraker  Act  of  1900. 
February  26,  1902. 

Joint  resolution:  return  of  imprinted  stamps. 
March  8,  1902,  ch.  140,  32  Stat.  54. 

Philippines.  ' 

April  12,  1902,  ch.  500,  32  Stat.  96. 

War  Revenue  Repeal  Act. 
May  9,  1902,  ch.  785,  32  Stat.  193. 

Amends  oleomargarine  law. 
-June  27,  1902,  ch.  1160,  32  Stat.  406. 

Refund  and  remission  of  certain  taxes:   legacy  and  bill  of 

lading. 
June  30,  1902,  32  Stat.  506. 

Redemption  of  stamps. 
July  1,  1902,  ch.  1369,  32  Stat.  691. 

Philippines. 
January  7,  1906,  34  Stat.  217. 

Denatured  alcohol. 


GENERAL  TABLE  OF  STATUTES.         xlx 

June  29,  1906,  34  Stat.  620. 

Porto  Rico. 
February  1,  1909,  35  Stat.  590. 

Refunding  taxes  on  foreign  exchange. 
February  4,  1909,  ch.  65,  35  Stat.  594. 

Porto  Rico. 
February  9,  1909,  ch.  101. 

Philippines. 
August  5,  1909,  ch.  6,  36  Stat.  118. 

Payne-AIdrich    tariff,    excepts    insular    possession^;    estab- 
lishes corporation  excise. 
April  9,  1912,  37  Stat.  81. 

Phosphorous  matches. 
October  3,  1913,  ch.  16,  §  4,  subd.  D. 

Porto  Rico. 
There  are  a  few  minor  acts  not  here  enumerated. 


THE  INTERNAL  REVENUE  LAWS  IN 
GENERAL. 


The  law  as  it  was  when  the  Act  of  1914  was  passed. 


It  is  to  be  borne  in  mind  that  the  Act  of  1914 
for  increased  revenue  is  but  an  emergency  measure 
which  is  super-added  to  an  established  system  of 
national  internal  taxation.  To  such  an  extent  is 
this  true  that  the  Senate  frowned  down  every  at- 
tempt to  avail  of  this  occasion  for  improving  the 
general  legislation  on  the  subject.  The  chairman  in 
charge  illustrated  this  by  saying,  ''I'm  talking  now 
about  the  revenue  law,  not  the  regular  law  " — al- 
though of  course  law  is  law  and  revenue  is  regular! 
Users  of  this  specialized  manual  may  well  desire 
some  general  information  as  to  other  more  perman- 
ent portions  of  the  system  and  as  to  the  principal 
statutes  and  their  interpretation. 

For  obvious  reasons  the  few  notes  which  are  ap- 
pended to  the  respective  statutes  enumerated  below 
are  only  intended  to  be  illustrative.  Each  of  the 
more  important  fields  has  its  own  technical,  and 
often  extended,  treatment  in  other  works.  Liquors 
and  tobacco,  for  instance,  constitute  almost  a  speci- 
alty, and  the  great  modern  excise  laws,  corporation 
and  income  taxes,  can  here  hardly  be  touched.    The 

[xxi] 


xxii  INTERNAL  REVENUE  LAWS  IN  GENERAL. 

material  in  this  chapter  is  in  effect  a  slightly  anno- 
tated topical  index  for  the  general  subject. 

The  internal  revenue  taxes  are  of  several  distin- 
guishable kinds,  though  not  technically  so  classified. 

1.  Special  taxes  on  occupations  which  are  definite 
in  amount,  like  license  fees. 

2.  Documentary  and  proprietary  stamp  taxes, 
where  the  unit  rate  is  definite,  and  the  taxpayer  can 
usually  readily  determine  the  total  amount. 

3.  Taxes  on  specified  things:  Liquors,  tobacco, 
opium,  playing  cards,  matches,  oleomargarine,  filled 
cheese,  mixed  flour  and  bank  circulation.  Those  on 
liquors  and  tobacco  are  large  revenue  producers,  but 
they  are  also  quasi-police  or  regulative  measures  in 
the  guise  of  taxes.  The  idea  of  protecting  the  com- 
munity runs  with,  and  occasionally  outruns,  the 
thought  of  revenue. 

4.  Excise  taxes  which  are  proportioned  to  the  tax- 
able amount  of  capital  employed,  business  done  or 
income  received. 

The  severest  penalties  and  the  strictest  enforce- 
ment apply,  for  the  most  part,  to  the  regulative  stat- 
utes and  the  special  taxes  dealing  with  liquor  and 
tobacco.  Aside  from  the  technical  provisions  of  the 
laws,  it  is  in  the  very  atmosphere  of  modern  tax 
enforcement  that  purely  revenue  measures  should 
be  administered  with  less  severity  than  police  and 
quasi-police  regulations.  Where  the  government 
only  wants  money,  and  the  amount  is  not  excessive, 
the  people  generaly  pay  a  tax  without  serious  de- 
fault or  deception,  and  there  is  little  need  of  crim- 


INTERNAL  REVENUE  LAWS  IN  GENERAL.  xxiii 

inal  or  penal  enforcement.  Ordinary  occupation  and 
stamp  taxes  occasion  more  administrative  difficulties 
than  actual  litigation  or  punishment.  In  the  fourth 
class  mentioned  above,  where  the  tax  is  assessed  on 
reported  or  ascertained  data,  there  is  felt  to  be  a 
hardship  similar  to  the  severity  of  the  regulative 
taxes.  The  government  here  encroaches  further 
upon  private  grounds,  by  more  or  less  inquisitorial 
methods  in  search  of  frauds,  and  a  sort  of  resent- 
ment leads  the  taxpayer  to  contest  the  assessment. 
A  man  may  often  elect  whether  or  not  he  is  to  incur 
any  one  of  the  taxes  of  the  first  three  classes;  but 
he  is,  in  a  sense,  cornered  as  to  the  fourth  class,  and 
must  submit  with  good  or  bad  grace.  Therefore,  as 
well  as  because  these  taxes  largely  have  their  initial 
incidence  upon  corporations,  it  is  here  that  the  major 
part  of  civil  litigation  arises. 

The  organization  and  administration  of  the  Internal  Revenue 
Office  are  provided  for  by  Title  XXXV  and  certain  other  sec- 
tions of  the  Revised  Statutes,  as  amended,  and  by  subsequent 
acts.  The  easiest  way  to  examine  these  laws  as  a  whole  is  to 
refer  to  the  official  compilation  made  under  the  direction  of  the 
commissioner.! 

The  methods  of  assessment  and  collection  of  taxes  are  covered 
by  §§  3172-3231,  and  amendments. 

For  applicability  of  general  laws,  see  post,  under  §  23. 

Special  or  license  taxes  are  imposed  by  §  3244,  but  it  has  been 
largely  amended,  and  several  subjects  are  covered  by  separate 
acts.  Special  taxes,  generally,  are  covered  by  §§  3232-3246.  The 
special  taxes  are  on  rectifiers,  liquor  dealers,  malt  dealers,  still 


1.  The  latest  extant  Compila-  Treas.  Dept.  Document  No.  2601, 

tion   of   Internal   Revenue   Laws  and   can   be  purchased  from  the 

is  that  of  1911,  showing  the  law  Public   Printer,   or   through   the 

in   force   March   4,    1911.     It   is  publishers  of  this  book. 


Xxiv  INTERNAL  REVENUE  LAWS  IN  GENERAL. 

makers,  brewers,  makers  of  oleomargarine,  adulterated  butter^ 
filled  cheese  and  mixed  flour. 

For  general  treatment  and  specific  application,  see  post,  the 
several  taxes  and  §  3. 

Distilled  spirits.  Including  imitation  wines,  etc.,  are  covered 
by  R.  S.  §§  3247-3334,  with  amendments  and  separate  acts.  See 
post,  §  2. 

Fermented  liquors,  by  R.  S.  §§  3335-3354,  amendments  and  Act 
of  June  18,  1890,  26  Stat.  162.    See  post,  §  i. 

Tobacco  and  snuff  are  covered  by  R.  S.  §§  3355-3386,  amend- 
ments and  separate  acts.    See  post,  §  4. 

Cigars  are  covered  by  R.  S.  §§  3287-3406. 

Opium,  by  the  Act  of  Oct.  1,  1890,  26  Stat.  567,  amended  by 
March  3,  1897,  29  Stat.  228,  and  by  February  9,  1909,  35  Stat.  614. 

While  the  penalties  are  severe,  the  law  is  not  properly  a 
revenue  measure,  but  a  method  of  suppressive  regulation.  (1912) 
Marks  v.  U.  S.,  196  Fed.  R.  476  (as  to  what  constitutes  manu- 
facture);  (1912)  Shelley  v.  U.  S.,  198  Fed.  R.  88;  (1913)  229  U. 
S.  239  (as  to  what  is  not  manufacture) ;  (1911)  U.  S.  v.  Don  Kee, 
192  Fed.  R.  733  (an  insufficient  indictment). 

Department  regulations  of  July  1,  1911,  cover  the  matter. 

The  same  Congress  which  enacted  the  present  emergency 
revenue  also  passed  a  complete  new  Act  on  Opium,  imposing 
registration  and  a  special  tax  on  producers,  makers  and  dis- 
tributors. The  tax  is  nominal  and  "  statistical "  or  regulative, 
but  the  provisions  are  elaborate  and  stringent.  WritteA  orders 
in  duplicate  are  required  for  every  transaction.  Penalties  run 
to  $2,000  or  five  years  or  both.  The  Act  applies  also  to  insular 
possessions  and  canal  zone,  and  does  not  repeal  the  Act  of 
February  9,  1909. 

Oleomargarine,  adulterated,  process  or  renovated  butter,  by 
the  Act  of  Aug.  2,  1886,  24  Stat.  209;  Oct.  1,  1890,  26  Stat.  621, 
amended  by  May  9,  1902,  32  Stat.  193. 

The  oleomargarine  Act  (1886,  ch.  209,  amended  1902,  ch.  93) 
is  upheld  by  (1904)  McCray  v.  U.  S.,  195  U.  S.  27,  49  L.  Ed.  78. 
"  The  manufacture  *  *  *  may  be  prohibited  by  a  free  gov- 
ernment without  a  violation  of  fundamental  rights."  P.  64; 
(1910)  Vermont  v.  U.  S.,  217  U.  S.  605,  54  L.  Ed.  899;  (1909) 
Moxley  v.  Hertz,  216  U.  S.  344,  54  L.  Ed.  510. 

Makers  and  dealers  pay  special  taxes  under  R.  S.  §  3244,  as 
well  as  a  tax  on  the  product.     See   (1914)   Hammond  Packing 


INTERNAL  REVENUE  LAWS  IN  GENERAL.         XXV 

<2o.  V.  Montana,  233  U.  S.  331,  as  to  State  legislation  on  the  sub- 
ject. (1888)  Powell  V.  Pena,  127  U.  S.  678,  32  L.  Ed.  253; 
(1897)  Schollenberger  v.  Penna,  171  U.  S.  1,  43  L.  Ed.  49;  (1897) 
Collins  V.  New  Hamp.,  171  U.  S.  30,  43  L.  Ed.  60. 

The  Commissioner  (Report  1913)  finds  the  whole  law  unsatis- 
factory and  urges  a  complete  revision. 

RenoTated  and  adulterated  butter.  (1912)  U.  S.  v.  11,150 
Pounds  of  Butter,  195  Fed.  Rep.  657;  (1908)  Coopersville  Co.  v. 
Lemon,  163  Fed.  Rep.  145. 

The  commissioner  finds  the  law  unsatisfactory  and  urges  a 
revision  and  the  substitution  of  the  butter  fat  test  for  the  pres- 
ent moisture  test,  which  in  strict  enforcement  has  done  injus- 
tice to  the  point  of  oppressiveness.    Report.  1913. 

There  are  special  taxes  on  makers  and  dealers  (R.  S.  §  3244), 
as  well  as  stamp  taxes  on  the  product. 

The  secretary  of  agriculture  enforces  this  law,  under  the 
Food  and  Drugs  Act  of  1906. 

A  dealer  in  adulterated  butter  is  liable  whether  or  not  he 
"  knowingly  "  offended.  (1913)  Lawrence  v.  Seyburn,  202  Fed. 
Rep.  913. 

Filled  cheese,  by  the  Act  of  June  6,  1896,  29  Stat.  253. 

This  business  has  practically  ceased  since  1910. 

There  is  a  coupon-stamp  tax  on  the  product,  and  both  makers 
and  dealers  pay  special  taxes  (R.  S.  §  3244). 

When  the  product  is  exported  it  must  first  pay  the  tax;  not 
relieved  as  in  tobacco.     (1904)  Cornell  v.  Coyne,  192  U.  S.  418. 

A  department  circular  (T.  D.  1516)  covers  the  matter. 

Mixed  flour,  by  the  Act  of  June  13,  1898,  30  Stat  448,  §§  35-49, 
amended  March  2,  1901,  31  Stat.  494  and  by  April  12,  1902,  32 
Stat.  96. 

The  makers  and  packers  pay  a  special  tax  under  R.  S.  §  3244 
and  the  product  pays  a  tax  collected  by  coupon-stamps. 

This  tax  is  of  course  not  in  any  true  sense  a  revenue  measure. 

Department  Regulations  No.  25,  revised  August,  1907,  cover 
the  matter. 

The  tax  on  legacies,  Act  of  June  13,  1898,  30  Stat.  464,  §§  29,  30, 
was  repealed  April  12,  1902,  32  Stat.  96,  with  a  saving  clause; 
and  the  Act  of  June  27,  1902,  32  Stat.  406,  provided  for  refund- 
ing certain  taxes  wrongfully  collected  on  contingent  interests. 


sacvi  INTERNAL  REVENUE  LAWS  IN  GENERAL. 

The  inheritance  or  succession  tax  is  retained  in  the  present 
summary,  partly  because  of  its  "  hang-over  "  feature. 

Succession  tax,  §§  29-31  of  the  Act  of  1898,  held  constitutional: 
not  a  direct  tax;  not  lacking  uniformity  of  reason  of  exemp- 
tion; not  exercise  of  power  belonging  to  the  States.  (1899) 
High  V.  Coyne,  93  Fed.  Rep.  450;  affirmed  (1900)  178  U.  S.  Ill, 
44  L.  Ed.  997;  (1900)  Knowlton  v.  Moore,  178  U.  S.  41-110,  44 
L.  Ed.  969;  elaborate  opinion  by  Justice  White.  (1904)  Vander- 
bilt  V.  Eidman,  196  U.  S.  480,  49  L.  Ed.  563;  (1901)  Eidman  v. 
Martinez,  184  U.  S.  578,  46  L.  Ed.  697;  (1909)  Hertz  v.  Wood- 
man, 218  U.  S.  205,  54  L.  Ed.  1001;  (1911)  Robertson  v.  U.  S., 
220  U.  S.  616,  55  L.  Ed.  611. 

The  corporation  tax  imposed  by  the  Tariff  Act  of  1909,  Act 
of  Aug.  5,  1909,  c.  6,  36  Stat.  112,  amended  by  June  17,  1910, 
is  upheld  and  elaborately  considered  in  the  Corporation  Tax 
Cases  (1911)  Flint  v.  Stone  Tracy  Co.,  220  U.  S.  107-177,  55  L. 
Ed.  389,  distinguishing  the  Income  Tax  Cases,  (1894)  Pollock 
V.  Farmers'  Loan,  157  U.  S.  429;  158  U.  S.  601,  39  L.  Ed.  759, 
1108. 

Some  recent  cases  on  the  Act  are:  (1914)  Anderson  v.  42 
Broadway,  213  Fed.  Rep.  777;  (1914)  Wilkes-Barre  Co.  v.  Davis, 
214  Fed.  Rep.  511;  (1914)  Nat.  Bk.  Commerce  v.  Allen,  211  Fed. 
Rep.  743;  (1912)  McCoach  v.  Minehill,  etc.,  Co.,  228  U.  S.  295; 
(1910)  Eliot  V.  Freeman,  220  U.  S.  178,  55  L.  Ed.  424;  (1912) 
Pennsylvania  Steel  v.  N.  Y.  City  Ry.,  198  Fed.  Rep.  774. 

Playing  cards.  Taxed  by  the  Act  of  Aug.  28,  1894,  28  Stat.  509, 
560.  The  manufacturer  must  register,  for  control,  but  does  not 
pay  a  special  tax. 

Cards  such  as  are  used  in  games  like  "  authors  "  are  exempt; 
but  the  tax  applies  to  all  substitutes  for  ordinary  cards.  T.  D. 
959,  Dec.  13,  1905.  (1906)  U.  S.  v.  Neustaedter,  149  Fed.  Rep. 
1010. 

Where  Thomas,  D.  J.,  wrote  thus  vigorously  about  the  badly 
framed  law,  the  "  intention  should  have  been  expressed  dis- 
tinctly, rather  than  in  a  form  that  causes  doubt  and  tends  to- 
baffle  an  appreciation  of  the  meaning.  *  *  *  The  statute  is 
so  ambiguous  as  to  be  positively  unfair,  and  it  is  so  obviously 
misleading  as  to  offend  the  sense  of  justice.  *  *  *  It  Is 
hoped  that  the  attention  of  Congress  may  be  called  to  the  neces- 


INTERNAL  REVENUE   LAWS   IN  GENERAL.        xxvii 

sity  of  amending  the  statute,  so  that  its  meaning  may  be  plain." 
(It  is  hardly  necessary  to  say  that  "  Congress  "  does  not  read 
the  reports  of  court  decisions  on  such  minor  subjects.) 

The  tax  on  bank  circulation  is  covered  by  R.  S.  3407-3417. 

The  tax  on  State  bank  circulation  illustrates  the  oft  quoted 
statement  of  Marshall,  C.  J.,  in  (1819)  McCulloch  v.  Maryland,  4 
Wheaton,  316,  431,  that  the  power  to  tax  involves  the  power  to 
destroy. 

It  was  designed  to  drive  such  circulation  out  of  existence. 
See  (1884)  Head  Money  Cases,  112  U.  S.  580,  596,  28  L.  Ed.  798, 
restating  the  case  (1869)  Veazie  Bk.  v.  Fenno,  8  Wall.  533,  549. 

Yet  it  was  seriously,  though  only  incidentally,  argued  in  the 
debates  on  this  Act  that  the  circulation  tax  of  1875  should  be 
removed  and  the  States  permitted  to  develop  a  safe  local  bank 
currency.     Cong.  Rec.  18522. 

Clearing  house  certificates  are  not  deemed  circulating  notes. 
T.  D.  1271,  Nov.  14,  1907. 

R.  S.  §  3408  taxes  circulation,  and  §  3583  makes  it  a  criminal 
offense  to  issue  notes,  checks  or  any  obligations  under  a  dollar 
for  use  as  money.    See  R.  S.  §  5214. 

Tax  on  white  phospliorons  matches. 

The  Act  of  April  9,  1912,  c.  75,  37  Stat.  81,  imposes  a  tax  (to 
take  effect  July  1,  1913)  on  white  phosphorous  matches,  to  be 
paid  by  stamps,  two  cents  per  hundred.  The  maker  must  be 
registered  and  give  a  bond,  but  pays  no  special  or  license  tax. 

In  1871  the  English  stamp  office  prepared  match  stamps  bear- 
ing the  legend  ex  luce  lucellum  (from  light  a  little  profit) ,  but  the 
classical  punster  was  punished;   the  wrappers  were  destroyed. 

Income  Tax,  corporate  and  individual. 

This  was  imposed  by  the  second  section  of  the  Tariff  Act  of 
1913,  Oct.  3,  c.  16.  All  relevant  internal  revenue  laws  are  made 
applicable. 

It  applies  to  Porto  Rico  and  the  Philippines,  but  the  revenues 
so  collected  accrue  to  the  respective  general  insular  govern- 
ments. 

The  American  Bar  Association  has  just  urged  a  complete  re- 
vision of  the  whole  law  as  being  loosely  drawn  and  most  un- 
satisfactory. 

The  income  tax  which  was  part  of  the  Wilson  Tariff  Act» 
August  5,  1894,  28  Stat.  509,  §§  27-37,  was  held  unconstitutional. 


xxviii       INTERNAL  REVENUE  LAWS  IN  GENERAL. 

(1895)  Pollock  V.  Farmers'  L.  &  T.  Ck).,  157  U.  S.  429,  39  L.  Ed. 
759;  158  U.  S.  601,  39  L.  Ed.  1108. 

Hawaii.  Act  of  April  30,  1900,  31  Stat.  141.  See  post,  under 
§  24. 

Porto  Eico.  Act  of  April  12,  1900,  31  Stat.  77;  Act  of  June  29, 
1906,  34  Stat.  620;  Act  of  Oct.  3,  1913,  c.  16,  §  4  (Tariff  Act). 
See  post,  under  §  24. 

Philippines.  Act  of  March  8,  1902,  32  Stat.  54;  Act  of  April 
28,  1904,  33  Stat.  574;  Act  of  Aug.  5,  1909,  36  Stat.  83  (also  as  to 
Guam  and  Tutuila);  Act  of  Oct.  3,  1913,  ch.  16,  §  4  (Tariff  Act). 
See  post,  under  §  24. 

Miscellaneous  statutory  proyisions.  Questions  of  jurisdiction, 
suits,  evidence,  practice,  duties  and  discipline  of  officers,  penal- 
ties for  perjury  and  bribery,  claims,  government  priority  in  in- 
solvent estates,  etc.,  etc.,  are  covered  by  the  Judicial  Code,  the 
Criminal  Code,  scattered  sections  of  the  R.  S.  and  special  acts. 

Several  other  acts  and  R.  S.  sections  are  in  force,  dealing 
with  various  subjects,  such  as  post-stamping,  §  3422,  redemp- 
tion, §  3426  amended,  manufacturing  in  bonded  warehouse, 
§  3433  amended,  withdrawals,  drawbacks,  assessment  of  un- 
stamped articles,  §  3437,  refunds  of  taxes  on  export  bills  of 
lading,  foreign  bills  of  exchange,  etc. 

R.  S.  §§  3441-3465,  contain  certain  provisions  applicable  in 
•common  to  several  objects.     See  post,  passim. 


THE 

WAR  REVENUE  LAW 

OR  THE 

EMERGENCY  REVENUE  ACT 
OF  1914 

Approved  October  22,  1914. 


AN  ACT  To  Increase  the  Intern ai.  Revenue,  and 
FOR  Other  Purposes. 

Be  it  enacted  by  the  Senate  and  House  of  Representa- 
tives of  the  United  States  of  America  in  Congress  as- 
sembled: 

FERMENTED  LIQUORS,  BEER,  ETC. 

That  there  shall  be  levied,  collected,  and  paid  in 
lieu  of  the  tax  of  $1  now  imposed  by  law,  a  tax  of 
$1.50  on  all  beer,  lager  beer,  ale,  porter,  and  other 
similar  fermented  liquor,  brewed  or  manufactured 
and  sold,  or  stored  in  warehouse,  or  removed  for 
consumption  or  sale,  within  the  United  States,  by 

[1] 


2  THE  WAR  REVENUE  LAW. 

whatever  name  such  liquors  may  be  called,  for  every 
barrel  containing  not  more  than  thirty-one  gallons; 
and  at  a  like  rate  for  any  other  quantity  or  for  the 
fractional  parts  of  a  barrel  authorized  and  defined 
by  law.  And  section  thirty-three  hundred  and 
thirty-nine  of  the  Eevised  Statutes  is  hereby 
amended  accordingly:  Provided,  That  the  addi- 
tional tax  imposed  in  this  section  on  all  fermented 
liquors  stored  in  warehouse  to  which  a  stamp  has 
been  affixed  shall  be  assessed  and  collected  in  the 
manner  now  provided  by  law  for  the  collection  of 
taxes  not  paid  by  stamp:  Provided  further,  That 
until  appropriate  stamps  are  prepared  and  fur- 
nished, the  stamps  heretofore  used  to  denote  the 
payment  of  the  internal-revenue  tax  on  fermented 
liquor  may  be  stamped  or  imprinted  with  a  suitable 
device  to  denote  the  new  rate  of  tax  herein  imposed, 
and  shall  be  affixed  to  all  packages  containing  such 
liquors  on  which  the  tax  imposed  by  this  Act  is 
paid.  Any  person  having  possession  of  unaffixed 
stamps  heretofore  issued  for  the  payment  of  the  tax 
on  fermented  liquors  shall  present  the  same  to  the 
collector  of  the  district,  Avho  shall  receive  them  at 
the  price  paid  for  such  stamps  by  the  purchaser  and 
issue  in  lieu  thereof  new  or  imprinted  stamps  at  the 
rate  provided  in  this  Act. 

Fermented  Liquors,  Beer,  Etc.     (Increased  Tax.) 

Cf.  Act  of  July  1,  1862,  12  Stat.  432;  Act  of  March  3,  1863,  12 
Stat.  713,  737;  Act  of  April  1,  1864;  Act  of  July  13,  1866,  14 
Stat.  98;  Act  of  March  1,  1879,  20  Stat.  327;  Act  of  June  13, 
1898,  30  Stat.  448;  Act  of  March  2,  1901,  31  Stat.  938;  Act  of 
April  12,  1902,  32  Stat.  54. 


THE  WAR  REVENUE  LAW.  3. 

Fermented  liquors  are  taxed  under  Revised  Statutes,  §§  3335 
et  seq.,  and  brewers  pay  a  special  tax  under  Revised  Statutes, 
§  3244.  The  present  act  merely  amends  §  3339  by  increasing  the 
barrel  rate.  The  tax  rate  has  varied  at  different  periods  from 
sixty  cents  to  two  dollars. 

The  method  of  collecting  the  tax  without  stamps  is  found  in 
Revised  Statutes,  §§  3182  et  seq.  Receipts  are  given  for  cash 
payments,  but  never  for  stamp  payments  nor  in  lieu  of  stamps, 
§  3183. 

As  the  increase  in  the  Act  of  1914  is  imposed,  not  as  an  extra 
tax,  but  by  express  substitution  "  in  lieu  of  the  tax  now  im- 
posed," the  department  requested  Congress  to  add  a  proviso  to 
the  last  section  of  the  Act,  so  as  to  restore  the  former  tax 
automatically  when  the  emergency  tax  ceases.     See  post,  §  24, 

Such  an  increase  of  an  excise  tax  is  constitutional.  (1902)- 
Patton  v.  Brady,  184  U.  S.  608,  46  L.  Ed.  713. 

The  added  tax  is  on  beer  stored  or  removed  by  the  brewer,, 
not  by  the  dealer.  Op.  Atty.  Gen.  XXII,  279;  XXIII,  227.  T.  D. 
20464,  Dec.  28,  1898;   20487,  Jan.  3,  1899. 

Beer  defined:  (1884)  Sarlls  v.  U.  S.,  152  U.  S.  570,  38  L.  Ed. 
556;  (1892)  In  re  McDonough,  49  Fed.  Rep.  360.  See  definition- 
of  brewer,  R.  S.  §  3244. 

Hop  tonic,  maltina,  hop  ale,  etc.  (1901)  Davis  v.  Daugherty, 
105  Fed.  Rep.  769;  T.  D.  829,  19154,  19025. 

Root,  spruce,  ginger  and  herb  beer.  T.  D.  19383,  July  2,  1898; 
20233,  Oct.  22,  1898;   T.  D.  19445. 

Rice  beer.     35  Int.  Rev.  Rec.  253. 

Speaking  of  the  war  which  induced  this  Act,  beer  as  distinct 
from  ale  began  in  England  when  hops  came  over  from  Flanders 
early  in  the  16th  century.  Wellington  repealed  the  beer  tax  in 
1830.  "  The  new  beer  bill  has  begun  its  operations.  Everybody 
is  drunk.  Those  who  are  not  singing  are  sprawling.  The  sov- 
ereign people  are  in  a  beastly  state."  Sydney  Smith,  Life  and 
Correspondence. 

Although  there  are  indications  of  haste  in  this  entire  act,  it 
was  stated  in  Congress  that  steps  had  early  been  taken  to  have 
the  new  stamps  printed.  The  unexpected  protraction  of  the  de- 
bates may  have  afforded  ample  time. 


4  THE  WAR  REVENUE  LAW. 

WINES,  LIQUEURS,  AND  CORDIALS. 

Sec.  2.  That  upon  all  still  wines,  domestic  and  im- 
ported, when  sold  or  offered  for  sale  or  consumption, 
there  shall  be  levied  and  collected  taxes  as  follows: 
On  each  bottle  containing  one-fourth  pint  or  less, 
one-fourth  cent;  on  each  bottle  containing  more 
than  one-fourth  pint  and  not  more  than  one-half 
pint,  one-half  cent;  on  each  bottle  containing  more 
than  one-half  pint  and  not  more  than  one  pint,  1 
cent;  and  on  each  bottle  containing  more  than  one 
pint  and  not  more  than  one  quart,  2  cents;  and  on 
still  wines  in  all  other  containers,  not  herein  speci- 
ally provided  for,  the  tax  shall  be  at  the  rate  of  8 
cents  per  gallon. 

That  upon  all  domestic  and  imported  champagne 
and  other  sparkling  wines,  and  upon  all  artificially 
carbonated  wines  when  sold  or  offered  for  sale  or 
consumption,  there  shall  be  levied  and  collected 
taxes  as  follows:  Upon  each  bottle  containing  one- 
half  pint  or  less,  5  cents;  on  each  bottle  containing 
more  than  one-half  pint  and  not  more  than  one  pint, 
10  cents;  on  each  bottle  containing  more  than  one 
pint  and  not  more  than  one  quart,  20  cents;  and  on 
other  all  containers  at  the  rate  of  20  cents  per  quart ; 
and  on  all  liqueurs,  cordials,  or  similar  compounds, 
domestic  and  imported,  by  whatever  name  sold  or 
offered  for  sale,  there  shall  be  levied  and  collected 
a  tax  on  each  bottle  containing  not  more  than  one- 
half  pint,  liA  cents;  more  than  one-half  pint  and  not 
more  than  one  pint,  3  cents;  more  than  one  pint  and 


THE  WAR  REVENUE  LAW.  5 

not  more  than  one  quart,  6  cents ;  and  on  larger  con- 
tainers a  tax  at  the  rate  of  24  cents  per  gallon. 

All  of  the  taxes  imposed  in  the  preceding  para- 
graphs of  this  section  shall  be  paid  by  stamps  to  be 
afl^ed  to  each  bottle  or  container  in  which  such  still 
wines,  champagne  wines,  carbonated  wines,  liqueurs, 
or  cordials,  or  similar  compounds  are  sold  or  offered 
for  sale:  Provided,  That  when  such  still  wines, 
champagne  wines,  carborated  wines,  liqueurs,  cor- 
dials, or  similar  compounds,  taxable  under  the  pro- 
visions of  this  section,  are  sold  or  delivered  by  the 
producer,  importer,  or  dealer  in  wholesale  quantities 
to  other  dealers,  including  rectifiers,  manufacturing 
chemists,  and  druggists,  the  dealer  receiving  and 
selling,  or  offering  the  same  for  sale  or  consumption 
to  any  person  other  than  a  dealer,  shall  affix  thereto 
the  stamps  hereinbefore  prescribed:  And  provided 
further.  That  the  stamp  tax  herein  imposed  shall 
not  be  collected  on  any  still  wine  used  by  any  recti- 
fier, manufacturing  chemist,  or  druggist  in  the  man- 
ufacture of  any  liqueur,  cordial,  or  compound  sub- 
ject to  any  internal-revenue  tax  imposed  by  this 
Act. 

The  Commissioner  of  Internal  Revenue  shall  cause 
to  be  prepared  suitable  and  special  stamps  denoting 
the  tax  herein  imposed,  to  be  affixed  and  canceled  in 
such  manner  as  he  with  the  approval  of  the  Secre- 
tary of  the  Treasury,  may  prescribe;  and  in  the  ab- 
sence of  such  stamps  from  any  bottle  or  container 
containing  wine,  liqueur,  cordial,  or  compound  tax- 
able under  the  provisions  of  this  section,  sold  or 


]Q  THE  WAR  REVENUE  LAW. 

offered  for  sale  or  consumption,  shall  be  prima  facie 
evidence  that  the  tax  thereon  has  not  been  paid,  and 
all  such  wines,  liqueurs,  cordials,  or  compounds  shall 
be  forfeited  to  the  United  States. 

There  shall  be  levied  and  assessed  against  the 
maker  or  producer  of  all  wines  fortified  under  the 
provisions  and  conforming  to  the  requirements  of 
the  sections  of  the  tariff  Act  of  October  first,  eigh- 
teen hundred  and  ninety,  relating  to  the  fortification 
of  pure  sweet  wines,  as  amended,  and  as  further 
amended  by  this  Act,  a  tax  of  55  cents  on  each  tax- 
able gallon  of  grape  brandy  or  wine  spirits  used  by 
him  in  the  fortification  of  such  wines:  Provided, 
hmvever,  That  the  maker  or  producer  of  such  forti- 
fied wines  shall,  under  regulations  and  suitable 
bonds,  to  be  prescribed  by  the  Commissioner  of  In- 
ternal Revenue,  with  the  approval  of  the  Secretary 
of  the  Treasury,  have  assessed  against  him  monthly 
the  said  tax  of  55  cents  on  each  taxable  gallon  of 
grape  brandy  or  wine  spirits  used  by  him  during 
the  preceding  month,  which  assessment  shall  be  paid 
within  ninety  days  from  the  date  of  notice  thereof: 
Provided  furtlier,  That  nothing  herein  contained 
shall  be  construed  as  exempting  any  still  wines,  cor- 
dials, liqueurs,  or  similar  compounds  from  the  pay- 
ment of  any  stamp  tax  provided  for  in  this  section. 

The  Commissioner  of  Internal  Revenue,  with  the 
approval  of  the  Secretary  of  the  Treasury,  is  hereby 
authorized  to  make  all  necessary  regulations  to 
make  effective  the  provisions  of  this  section. 

That   sections   forty-two,   forty-three,   forty-five, 


THE  WAR  REVENUE  LAW.  7 

forty-six,  and  forty-nine  of  the  Act  of  October  first, 
eighteen  hundred  and  ninety,  as  amended  by  sec- 
tion sixty-eight  of  an  Act  approved  August  twenty- 
eighth,  eighteen  hundred  and  ninety-four,  and  by  an 
Act  approved  June  seventh,  nineteen  hundred  and 
six,  are  further  amended  to  read  as  follows: 

* '  Sec.  42.  That  any  producer  of  pure  sweet  wines 
may  use  in  the  preparation  of  such  sweet  wines, 
under  such  regulations,  and  after  the  filing  of  such 
notices  and  bonds,  together  with  the  keeping  of  such 
records  and  the  rendition  of  such  reports  as  to  ma- 
terials and  products  as  the  Commissioner  of  Inter- 
nal Revenue,  with  the  approval  of  the  Secretary  of 
the  Treasury,  may  prescribe,  wine  spirits  produced 
by  any  duly  authorized  distiller,  and  the  Commis- 
sioner of  Internal  Revenue  in  determining  the  lia- 
bility of  any  distiller  of  wine  spirits  to  assessment 
under  section  thirty-three  hundred  and  nine  of  the 
Revised  Statutes,  is  authorized  to  allow  such  dis- 
tiller credit  in  his  computations  for  the  wine  spirits 
withdrawn  to  be  used  in  fortifying  sweet  wines 
under  this  Act:  Provided,  That  such  wine  contain- 
ing after  fortification  more  than  twenty-four  per 
centum  of  alcohol,  as  defined  by  section  thirty-two 
hundred  and  forty-nine  of  the  Revised  Statutes, 
shall  be  forfeited  to  the  United  States. 

''  Sec.  43.  That  the  wine  spirits  mentioned  in  sec- 
tion forty-two  of  this  Act  is  the  product  resulting 
from  the  distillation  of  fermented  grape  juice,  to 


g  THE  WAR  REVENUE  LAW. 

which  water  may  have  been  added  prior  to,  during, 
or  after  fermentation,  for  the  sole  purpose  of  facili- 
tating the  fermentation  and  economical  distillation 
thereof,  and  shall  be  held  to  include  the  product 
from  grapes  or  their  residues  commonly  known  as 
grape  brandy,  and  shall  include  commercial  grape 
brandy  which  may  have  been  colored  with  burnt 
sugar  or  caramel;  and  the  pure  sweet  wine  which 
may  be  fortified  with  wine  spirits-  under  the  pro- 
visions of  this  Act  is  fermented  or  partially  fer- 
mented grape  juice  only,  with  the  usual  cellar  treat- 
ment, and  shall  contain  no  other  substance  whatever 
introduced  before,  at  the  time  of,  or  after  fermen- 
tation, except  as  herein  expressly  provided:  P^-o- 
vided,  That  the  addition  of  pure  boiled  or  condensed 
grade  must  or  pure  crystallized  cane  or  beet  sugar, 
or  pure  dextrose  sugar  or  water,  or  any  or  all  of 
them,  to  the  pure  grape  juice  before  fermentation, 
or  to  the  fermented  product  of  such  grape  juice,  or 
to  both,  prior  to  the  fortification  provided  in  this 
Act,  either  for  the  purpose  of  perfecting  sweet  wines 
according  to  commercial  standards  or  for  mechanical 
purposes,  shall  not  be  excluded  by  the  definition  of 
pure  sweet  wine  aforesaid :  Provided,  however,  That 
the  cane  or  beet  sugar,  or  pure  dextrose  sugar  so 
used  shall  not  be  in  excess  of  eleven  per  centum  of 
the  weight  of  the  wine  to  be  fortified  under  this  Act: 
And  provided  further,  That  the  addition  of  water 
herein  authorized  shall  be  under  such  regulatit)ns 
and  limitations  as  the  Commissioner  of  Internal 
Revenue,  with  the  approval  of  the  Secretary  of  the 


THE  WAR  REVENUE  LAW.  9 

Treasury,  may  from  time  to  time  prescribe:  Pro- 
vided, however.  That  records  kept  in  accordance  with 
such  regulations  as  to  the  percentage  of  saccharine, 
acid,  alcoholic,  and  added  water  content  of  the  wine 
offered  for  fortification  shall  be  open  to  inspection 
by  any  official  of  the  Department  of  Agriculture 
thereto  duly  authorized  by  the  Secretary  of  Agri- 
culture; but  in  no  case  shall  such  wines  to  which 
water  has  been  added  be  eligible  for  fortification 
under  the  provisions  of  this  Act,  where  the  same, 
after  fermentation  and  before  fortification,  have  an 
alcoholic  strength  of  less  than  five  per  centum  of 
their  volume. 

''  Sec.  45.  That  under  such  regulations  and  offi- 
cial supervision,  and  upon  the  execution  of  such 
entries  and  the  giving  of  such  bonds,  bills  of  lading, 
and  other  security  as  the  Commissioner  of  Internal 
Revenue,  with  the  approval  of  the  Secretary  of  the 
Treasury,  shall  prescribe,  any  producer  of  pure 
sweet  wines  as  defined  by  this  Act  may  withdraw 
wine  spirits  from  any  special  bonded  warehouse  in 
original  packages  or  from  any  registered  distillery 
in  any  quantity  not  less  than  eighty  wine  gallons, 
and  may  use  so  much  of  the  same  as  may  be  re- 
quired by  him  under  such  regulations,  and  after  the 
filing  of  such  notices  and  bonds  and  the  keeping  of 
such  records  and  the  rendition  of  such  reports  as  to 
materials  and  products  and  the  disposition  of  the 
same  as  the  Commissioner  of  Internal  Revenue,  with 
the  approval  of  the  Secretary  of  the  Treasury,  shall 


20  THE  WAR  REVENUE  LAW. 

prescribe,  in  fortifying  the  pure  sweet  wines  made 
by  him,  and  for  no  other  purpose,  in  accordance  with 
the  foregoing  limitations  and  provisions;  and  the 
Commissioner  of  Internal  Revenue,  with  the  ap- 
proval of  the  Secretary  of  the  Treasury,  is  author- 
ized whenever  he  shall  deem  it  to  be  necessary  for 
the  prevention  of  violations  of  this  law  to  prescribe 
that  wine  spirits  withdrawn  under  this  section  shall 
not  be  used  to  fortify  wines  except  at  a  certain  dis- 
tance prescribed  by  him  from  any  distillery,  rectify- 
ing house,  winery,  or  other  establishment  used  for 
producing  or  storing  distilled  spirits,  or  for  making 
or  storing  wines  other  than  wines  which  are  so  forti- 
fied, and  that  in  the  building  in  which  such  fortifi- 
cation of  wines  is  practiced  no  wines  or  spirits  other 
than  those  permitted  by  this  regulation  shall  be 
stored  in  any  room  or  part  of  the  building  in  which 
fortification  of  wines  is  practiced.  The  use  of  wine 
spirits  for  the  fortification  of  sweet  wines  under 
this  Act  shall  be  under  the  immediate  supervision 
of  an  ofificer  of  internal  revenue,  who  shall  make  re- 
turns describing  the  kinds  and  quantities  of  wine 
so  fortified,  and  shall  affix  such  stamps  and  seals  to 
the  packages  containing  such  wines  as  may  be  pre- 
scribed by  the  Commissioner  of  Internal  Revenue, 
with  the  approval  of  the  Secretary  of  the  Treasury; 
and  the  Commissioner  of  Internal  Revenue  shall 
provide  by  regulations  the  time  within  which  wines 
so  fortified  with  the  wine  spirits  so  withdrawn  may 
be  subject  to  inspection,  and  for  final  accounting 
for  the  use  of  such  wine  spirits  and  for  rewarehous- 


THE  WAR  REVENUE  LAW.  H 

ing  or  for  payment  of  the  tax  on  any  portion  of  such 
wine  spirits  which  remain  not  used  in  fortifying 
pure  sweet  wines. 

'*  Sec.  46.  That  wine  spirits  may  be  withdrawn 
from  special  bonded  warehouses  at  the  instance  of 
any  person  desiring  to  use  the  same  to  fortify  any 
wines,  in  accordance  with  commercial  demands  of 
foreign  markets,  when  such  wines  are  intended  for 
exportation,  without  the  payment  of  tax  on  the 
amount  of  wine  spirits  used  in  such  fortification, 
under  such  regulations,  and  after  making  such  en- 
tries, and  executing  and  filing  with  the  collector  of 
the  district  from  which  the  removal  is  to  be  made 
such  bonds  and  bills  of  lading,  and  giving  such  other 
additional  security  to  prevent  the  use  of  such  wine 
spirits  free  of  tax  otherwise  than  in  the  fortification 
of  wine  intended  for  exportation  and  for  the  due 
exportation  of  the  wine  so  fortified,  as  may  be  pre- 
scribed by  the  Commissioner  of  Internal  Revenue, 
with  the  approval  of  the  Secretary  of  the  Treasury; 
and  all  of  the  provisions  of  law  governing  the  ex- 
portation of  distilled  spirits  free  of  tax,  so  far  as 
applicable,  shall  apply  to  the  withdrawal  and  use 
of  wine  spirits  and  the  exportation  of  the  same  in 
accordance  with  this  section;  and  the  Commissioner 
of  Internal  Revenue  is  authorized,  subject  to  the  ap- 
proval of  the  Secretary  of  the  Treasury,  to  prescribe 
that  wine  spirits  intended  for  the  fortification  of 
wines  under  this  section  shall  not  be  introduced  into 
such  wines  except  under  the  immediate  supervision 


12  THE  WAR  REVENUE  LAW. 

of  an  officer  of  internal  revenue,  who  shall  make  re- 
turns describing  the  kinds  and  quantities  of  wine 
so  fortified,  and  shall  affix  such  stamps  and  seals  to 
the  packages  containing  such  wines  as  may  be  pre- 
scribed by  the  Commissioner  of  Internal  Revenue, 
with  the  approval  of  the  Secretary  of  the  Treasury. 
Whenever  transportation  of  such  wine  is  to  be  ef- 
fected by  land  carriage  the  Commissioner  of  Internal 
Revenue,  with  the  approval  of  the  Secretary  of  the 
Treasury,  shall  prescribe  such  regulations  as  to  seal- 
ing packages  and  vehicles  containing  the  same,  and 
as  to  the  supervision  of  transportation  from  the 
point  of  departure,  which  point  shall  be  determined 
as  the  place  where  such  Avine  spirits  may  be  intro- 
duced into  such  wines  to  the  point  of  destination  as 
may  be  necessary  to  insure  the  due  exportation  of 
such  fortified  wines:  Provided,  That  where,  in  ac- 
cordance with  regulations  of  the  Commissioner  of 
Internal  Revenue,  with  the  approval  of  the  Secre- 
tary of  the  Treasury,  wines  fortified  under  the  pro- 
visions of  this  Act  with  brandy  taxable  at  55  cents 
per  proof  gallon  are  exported  directly  from  the 
winery  where  fortified,  there  shall  be  allowed  an 
abatement  or  refund  of  tax  equivalent  to  55  cents 
per  gallon  on  each  proof  gallon  of  wine  spirits  con- 
tained in  such  wine  at  the  time  of  exportation,  which 
amount  of  wine  spirits  shall  be  ascertained  by  the 
Commissioner  of  Internal  Revenue  under  regula- 
tions approved  by  the  Secretary  of  the  Treasury: 
Provided,  That  such  wine  spirits  on  which  abatement 
or  refund  of  tax  is  allowed  shall  not  exceed  the  total 


THE  WAR  REVENUE  LAW.  13 

amount  of  alcohol  in  such  wine  over  and  above  four- 
teen per  centum  thereof. 

-  **  Sec.  49.  That  wine  spirits  used  in  fortifying 
wines  may  be  recovered  from  such  wines  only  on  the 
premises  of  a  duly  authorized  grape-brandy  distiller, 
and  for  the  purpose  of  such  recovery  wine  so  forti- 
fied may  be  received  as  material  on  the  premises  of 
such  a  distiller,  on  a  special  permit  of  the  collector 
of  internal  revenue  in  whose  district  the  distillery 
is  located;  and  the  distiller  will  be  held  to  pay  the 
tax  on  the  product  from  such  wines  as  will  include 
both  the  alcoholic  strength  therein  produced  by  the 
fermentation  of  the  grape  juice  and  that  obtained 
from  the  added  distilled  wine  spirits:  Provided, 
That  when  application  for  such  special  permit  for 
redistillation  shall  be  made  by  the  producer  of  any 
wines  fortified  with  brandy  subject  to  the  tax  of  55 
cents  per  proof  gallon,  before  such  wine  shall  have 
been  moved  from  the  premises  of  the  winery  where 
fortified  and  the  redistillation  is  had  under  regula- 
tions made  by  the  Commissioner  of  Internal  Rev- 
enue, with  the  approval  of  the  Secretary  of  the 
Treasury,  an  abatement  or  refund  of  the  tax  assessed 
against  said  producer  shall  be  allowed  equivalent  to 
55  cents  per  proof  gallon  of  brandy  contained  in 
said  spirits  at  the  time  of  redistillation,  which 
amount  of  brandy  shall  be  ascertained  by  the  Com- 
missioner of  Internal  Revenue,  under  regulations 
approved  by  the  Secretary  of  the  Treasury,  and  wine 
spirits  so  recovered  may  be  used  in  the  manner  pro- 


14  THE  WAR  REVENUE  LAW. 

vided  by  law  for  the  fortification  of  other  wiuei 
Provided,  That  such  wine  spirits  on  which  abate- 
ment or  refund  of  tax  is  allowed  shall  not  exceed  the 
total  amount  of  alcohol  in  such  wine  over  and  above 
fourteen  per  centum  thereof." 

That  section  three  and  section  six  of  the  Act  of 
June  seventh,  nineteen  hundred  and  six,  amending 
'  the  laws  relating  to  the  fortification  of  pure  sweet 
wines,  are  hereby  amended  to  read  as  follows: 

*'  Sec.  3.  That  the  Commissioner  of  Internal  Rev- 
enue is  hereby  authorized  to  assign  at  each  winery 
where  wines  are  to  be  fortified  such  number  of 
gangers  or  storekeeper  gangers,  in  the  capacity  of 
gangers,  for  special  duties  as  may  be  necessary  for 
the  proper  supervision  of  the  making  and  fortifying 
of  such  wines,  and  the  compensation  of  such  officers 
shall  not  exceed  $5  per  diem  while  so  assigned,  to- 
gether with  their  actual  and  necessary  traveling  ex- 
penses, and  also  a  reasonable  allowance  for  their 
board  bills,  to  be  fixed  by  the  Commissioner  of  Inter- 
nal Revenue,  but  not  to  exceed  $2  per  diem  for  said 
board  bills.  That  bonds  hereafter  given  under  the 
provisions  of  the  aforesaid  Act  of  October  firsts 
eighteen  hundred  and  ninety,  as  amended,  shall  be 
conditioned  for  the  payment  of  the  tax  on  all  brandy 
removed  thereunder  and  not  used  and  accounted  for 
within  the  time  and  in  the  manner  required  by  law 
and  regulations,  and  for  the  payment  of  all  taxes 
imposed  on  the  brandy  so  withdrawn  and  used  for 
fortifications;  and  the  said  bonds  shall  contain  such 


THE  WAR  REVENUE  LAW.  15 

other  conditions  as  the  Commissioner  of  Internal 
Revenue,  with  the  approval  of  the  Secretary  of  the 
Treasury,  may  by  regulation  prescribe. 

"  Sec.  6.  That  any  person  who  by  any  process 
recovers  from  wines  fortified  under  the  provisions 
of  the  aforesaid  Act  approved  October  first,  eighteen 
hundred  and  ninety,  and  amendments  thereto,  any 
brandy  or  wine  spirits  used  in  the  manufacture  or 
fortification  of  said  wine,  otherwise  than  is  provided 
for  in  said  Act  and  its  amendments,  or  who  shall 
rectify,  mix,  or  compound  with  distilled  spirits  or 
other  materials,  except  as  provided  in  this  Act,  such 
grape  brandy  fortified  wines  or  wine  spirits  unlaw- 
fully recovered  therefrom,  shall,  on  conviction,  be 
punished  for  each  such  offense  by  a  fine  of  not  less 
than  $200  nor  more  than  $1,000.  But  the  provisions 
of  this  section  and  the  provisions  of  section  thirty- 
two  hundred  and  forty-four  of  the  Revised  Statutes 
of  the  United  States,  as  amended,  relating  to  rectifi- 
cation, or  other  internal  revenue  laws  of  the  United 
States,  shall  not  be  held  to  apply  to  or. prohibit  the 
mixing  or  blending  of  pure  sweet  wines  fortified  un- 
der the  provisions  of  this  Act  with  each  other  or  with 
other  wines :  Provided,  That  the  pure  sweet  wines 
fortified  under  the  provisions  of  this  Act  may  be 
used  in  the  manufacture  of  cordials,  liqueurs,  and 
similar  compounds  on  which  an  internal  revenue  tax 
of  24  cents  a  gallon  is  imposed,  and  otherwise  the 
provision  of  section  thirty-two  hundred  and  forty- 


16  THE  WAR  REIVENUE  LAW. 

four  of  the  Eevised  Statutes  of  the  United  States 
shall  remain  in  full  force  and  effect." 

Wines,  Liqueurs  and  Cordials. 

The  Act  went  into  effect  as  law  at  midnight,  October  22-23, 
1914.  This  section  became  applicable  at  once,  and  the  Commis- 
sioner of  Internal  Revenue  sent  the  following  telegram  to  all 
collectors: 

"  Beginning  with  to-day  tax  accrues  on  all  wines  sold :  2 
cents  a  quart  on  still  wines,  20  cents  a  quart  on  champagne, 
other  sparkling  and  artificially  carbonated  wines;  6  cents  a 
quart  on  liquors,  cordials  and  similar  compounds,  and  propor- 
tionate rates  for  other  quantities.  Until  stamps  are  furnished, 
require  dealers  who  sell  to  consumers  to  keep  account  of  sales 
on  and  after  to-day." 

Bottled  wines  of  all  kinds  are  taxed  under  Schedule  B  of  the 
Act  of  1898,  June  13,  ch.  448.  This  tax  was  eliminated  from 
Schedule  B  of  the  present  Act,  and  the  whole  matter  brought 
under  §  2.    And  see  the  Act  of  June  6,  1872,  §  12. 

Wine  spirits  (so-called  cognac,  distilled  from  fermented  grape 
juice)  may  be  used  practically  free  of  tax  under  limitations,  in 
fortifying  pure  sweet  wine  (made  of  grape  juice  and  sugar). 
Act  of  Oct.  1,  1890,  26  Stat.  567,  621,  amended  by  Aug.  28,  1894, 
28  Stat.  509,  and  June  7,  1906,  34  Stat.  215.  This  last  Act  im- 
posed a  tax  of  three  cents  a  gallon  on  brandy  used  in  fortifying 
sweet  wines,  expressly  "  to  cover  the  expenses  to  the  govern- 
ment "  in  this  connection. 

The  provisions  of  the  House  bill  as  to  wines  were  compara- 
tively simple,  but  the  matter  was  given  much  attention  in  the 
Senate,  whose  substitute  was  finally  accepted.  Ugly  things' 
were  said  about  local  and  privileged  interests,  but  the  "  inter- 
ests "  themselves  got  together  and  agreed  upon  the  solution 
which  was  adopted.  The  new  plan  necessitated  amendments  to 
the  statutes,  supra,  on  the  fortification  of  wines.  The  changes 
may  be  summarized  thus: 

Grape  brandy,  or  wine  spirits,  used  for  fortifying  wines,  55 
cents  a  gallon,  instead  of  three  cents,  assessed  monthly. 

Involves  amending  26  Stat.  621,  sections  42,  43,  45,  46  and  49. 

42.  By  omitting  the  limitation  to  distillers;  the  reference  to 


THE  WAR  REVENUE  LAW.  17 

saccharine  preservation  and  the  14  per  cent,  alcohol  limitation, 
but  retaining  the  forfeiture  for  excess  of  24  per  cent. 

43.  By  omitting  the  4  per  cent,  sugar  requirement;  allowing 
use  of  commercial  brandy;  increasing  10  per  cent,  added  sugar 
limit  to  11  per  cent;  substituting  "dextrose"  as  a  better  name 
for  anhydrous  sugar;  and  permitting  u^e  of  water  under  limita- 
tions and  regulations.     Department  of  Agriculture  to  inspect. 

45.  Permitting  wine  to  be  fortified  elsewhere  than  at  the  vine- 
yard. 

46.  Permitting  wine  for  export  to  be  fortified  at  the  winery, 
instead  of  alongside  the  ship;  and  allowing  a  drawback. 

49.  Allowing  a  rebatement  of  tax  on  brandy  recovered  in  the 
process  on  the  premises. 

Amending,  also,  34  Stat.  215,  sections  3  and  6: 

3.  Payment  of  tax  to  be  secured  by  bonds. 

6.  Extending  exemption  from  special  tax  of  persons  using  for- 
tified wines  in  making  tax-paid  cordials,  etc.;  and  permitting 
wines  to  be  blended. 

Imitation  wines,  not  made  from  native  grapes,  are  taxed  ten 
cents  a  pint  under  R.  S.  §  3328. 

Wine  made  from  native  grapes  was  not  an  imitation  cham- 
pagne, although  carbonic  acid  gas  was  injected  into  it.  (1873) 
U.  S.  v.  One  Case  of  Wine,  6  Ben.  493. 

The  selling  of  wines  is  dealing  in  liquors  and  requires  a  spe-  ' 
cial   tax   under  R.   S.   §   3244.    Vintners   and   druggists  are   ex- 
cepted, under  limitations,  by  section  3246. 

A  fermented  liquor  made  from  oranges,  sugar  and  elder  blos- 
soms is  wine.     T.  D.  19089,  1898. 

50,  also,  a  wine  used  as  "  casing  fluid  for  leaf  tobacco,"  if  it 
is  potable.     T.  D.  19333,  1898. 

Creme  de  menthe  formerly  could  not  be  made  nor  sold  with- 
out paying  a  special  tax.  T.  D.  33,  Feby.  3,  1900.  But  the  pres- 
ent Act  exempts  (only  from  special  tax)  the  makers  of  cordials 
who  used  fortified  wines. 

A  genuine  medicinal  blackberry  cordial  did  not  require  a  tax. 
T.  D.  57,  March  3,  1900. 

Vermouth  was  not  a  wine  under  the  Act  of  1898.  (1907)  Tay- 
lor V.  Treat,  153  Fed.  Rep.  656;  166  Id.  1021. 

The  Congressional  debates,  and  especially  the  petitions  and 
protests  submitted,  portend  a  reduction  of  revenue  from  what 


Ig  THE  WAR  REIVENUE  LAW. 

Sir  Mountsteuart  Grant-Duff  called  "  the  ravages  of  temperance." 
(19th  Cent,  July,  1887.) 

For  an  interesting  sketch  of  wine  duties  in  England,  see  Syd- 
ney Buxton,  Finance  and  Politics,  I,  232  et  seq.  A  chief  reason 
why  port  and  sherry  are  "  fit  for  gentlemen  "  in  England  is  that 
the  "  people  were  positively  punished,  fined  and  starved  out  of 
their  taste  "  for  other  wines  by  the  Methuen  Treaty  of  1703  and 
the  subsequent  taxes  which  discriminated  in  favor  of  Portugal 
"  our  old  and  faithful  ally  "  when  most  other  countries  turned 
against  England. 

SPECIAL  TAXES. 

Sec.  3.  That  on  and  after  November  first,  nineteen 
hundred  and  fourteen,  special  taxes  shall  be,  and 
hereby  are,  imposed  annually  as  follows,  that  is  to 
say: 

First.  Bankers  shall  pay  $1  for  each  $1,000  of 
capital  used  or  employed,  and  in  estimating  capital 
surplus  and  undivided  profits  shall  be  included.  The 
amount  of  such  annual  tax  shall  in  all  cases  be  com- 
puted on  the  basis  of  the  capital,  surplus,  and  undi- 
vided profits  for  the  preceding  fiscal  year.  Every 
person,  firm,  or  company,  and  every  incorporated  or 
other  bank,  having  a  place  of  business  where  credits 
are  opened  by  the  deposit  or  collection  of  money  or 
currency,  subject  to  be  paid  or  remitted  upon  draft, 
check,  or  order,  or  where  money  is  advanced  or 
loaned  on  stocks,  bonds,  bullion,  bills  of  exchange, 
or  promissory  notes,  or  where  stocks,  bonds,  bullion, 
bills  of  exchange,  or  promissory  notes  are  received 
for  discount  or  sale,  shall  be  a  banker  under  this 
Act:  Provided,  That  any  postal  savings  bank,  or 
savings  bank  having  no  capital  stock,  and  whose 


THE  WAR  REVENUE  LAW.  19 

business  is  confined  to  receiving  deposits  and  loaning 
or  investing  the  same  for  the  benefit  of  its  depositors, 
and  which  does  no  other  business  of  banking,  shall 
not  be  subject  to  this  tax. 

Second.  Brokers  shall  pay  $30.  Every  person, 
firm,  or  company,  whose  business  it  is  to  negotiate 
purchases  or  sales  of  stocks,  bonds,  exchange,  bul- 
lion, coined  money,  bank  notes,  promissory  notes,  or 
other  securities,  for  themselves  or  others,  shall  be 
regarded  as  a  broker:  Provided,  That  any  person 
having  paid  the  special  tax  as  a  banker  shall  not  be 
required  to  pay  the  special  tax  as  a  broker. 

Third.  Pawnbrokers  shall  pay  $50.  Every  person, 
firm,  or  company  whose  business  or  occupation  it  is 
to  take  or  receive,  by  way  of  pledge,  pawn,  or  ex- 
change, any  goods,  wares,  or  merchandise,  or  any 
kind  of  personal  property  whatever,  as  security  for 
the  repayment  of  money  loaned  thereon,  shall  be 
deemed  a  pawnbroker. 

Fourth.  Commercial  brokers  shall  pay  $20. 
Every  person,  firm,  or  company  whose  business  It 
is  as  a  broker  to  negotiate  sales  or  purchases  of 
goods,  wares,  produce,  or  merchandise,  or  to  ne- 
gotiate freights  and  other  business  for  the  owners 
of  vessels,  or  for  the  shippers  or  consignors  or  con- 
signees of  freight  carried  by  vessels,  shall  be  re- 
garded as  a  commercial  broker  under  this  Act. 

Fifth.  Custom-house  brokers  shall  pay  $10.  Every 
person,  firm,  or  company  whose  occupation  it  is,  as 
the  agent  of  others,  to  arrange  entries  and  other 
custom-house  papers,  or  transact  business  at  any 


20  THE  WAR  REVENUE  LAW. 

port  of  entry  relating  to  the  importation  or  exporta- 
tion of  goods,  wares,  or  merchandise,  shall  be  re- 
garded as  a  custom-house  broker. 

Sixth.  Proprietors  of  theaters,  museums,  and  con- 
cert halls,  where  a  charge  for  admission  is  made, 
having  a  seating  capacity  of  not  more  than  two  hun- 
dred and  fifty,  shall  pay  $25;  ha^dng  a  seating  ca- 
pacity of  more  than  two  hundred  and  fifty  and  not 
exceeding  five  hundred,  shall  pay  $50 ;  having  a  seat- 
ing capacity  exceeding  five  hundred  and  not  exceed- 
ing eight  hundred,  shall  pay  $75;  having  a  seating 
capacity  of  more  than  eight  hundred,  shall  pay  $100. 
Every  edifice  used  for  the  purpose  of  dramatic  or 
operatic  or  other  representations,  plays,  or  perform- 
ances, for  admission  to  which  entrance  money  is  re- 
ceived, not  including  halls  or  armories  rented  or 
used  occasionally  for  concerts  or  theatrical  repre- 
sentations, shall  be  regarded  as  a  theater :  Provided, 
That  whenever  any  such  edifice  is  under  lease  at  the 
passage  of  this  Act,  the  tax  shall  be  paid  by  the 
lessee,  unless  otherwise  stipulated  between  the  par- 
ties to  said  lease. 

Seventh.  The  proprietor  or  proprietors  of  circuses 
shall  pay  $100.  Every  building,  space,  tent,  or  area 
where  feats  of  horsemanship  or  acrobatic  sports  or 
theatrical  performances  not  otherwise  provided  for 
in  this  Act  are  exhibited  shall  be  regarded  as  a  cir- 
cus :  Provided,  That  no  special  tax  paid  in  one  State, 
Territory,  or  the  District  of  Columbia  shall  exempt 
exhibitions  from  the  tax  in  another  State,  Territory, 
or  the  District  of  Columbia,  and  but  one  special  tax 


THE  WAR  REVENUE  LAW.  21 

shall  be  imposed  for  exhibitions  within  any  one 
State,  Territory,  or  District. 

Eighth.  Proprietors  or  agents  of  all  other  public 
exhibitions  or  shows  for  money  not  enumerated  in  this 
section  shall  pay  $10 :  Provided,  That  a  special  tax 
paid  in  one  State,  Territory,  or  the  District  of  Co- 
lumbia shall  not  exempt  exhibitions  from  the  tax  in 
another  State,  Territory,  or  the  District  of  Columbia, 
and  but  one  special  tax  shall  be  required  for  exhibi- 
tions within  any  one  State,  Territory,  or  the  District 
of  Columbia :  Provided  further,  That  this  paragraph 
shall  not  apply  to  Chautauquas,  lecture  lyceums, 
agricultural  or  industrial  fairs,  or  exhibitions  held 
under  the  auspices  of  religious  or  charitable  asso- 
ciations. 

Ninth.  Proprietors  of  bowling  alleys  and  billiard 
rooms  shall  pay  $5  for  each  alley  or  table.  Every 
building  or  place  where  bowls  are  thrown  or  where 
games  of  billiards  or  pool  are  played,  and  that  are 
open  to  the  public  with  or  without  price,  shall  be 
regarded  as  a  bowling  alley  or  a  billiard  room,  re- 
spectively. 

Tenth.  Commission  merchants  shall  pay  $20. 
Every  person,  firm,  or  company  whose  business  or 
occupation  it  is  to  receive  into  his  or  its  possession 
any  goods,  wares,  or  merchandise  to  sell  the  same  on 
commission  shall  be  regarded  as  a  commission  mer- 
chant :  Provided,  That  any  person  having  paid  the 
special  tax  as  a  commercial  broker  shall  not  be  re- 
quired to  pay  the  special  tax  as  a  commission  mer- 
chant :    Provided  further,  That  this  provision  shall" 


22  THE  WAR  REVENUE  LAW. 

not  apply  to  commission  houses  run  upon  a  coopera- 
tive plan. 

Special  Taxes:    (License  or  Occupation  Taxes). 

The  section  re-enacts,  with  some  changes,  the  same  plan, 
phraseology  and  tax  rates  as  were  found  in  the  Act  of  June  13, 
1898  (30  Stat.  448),  which  in  turn  was  similarly  based  on  the 
Act  of  June  30,  1864  (13  Stat.  223),  and  the  Act  of  July  1,  1862 
(12  Stat.  432).  The  Acts  of  1862  and  1864  required  licenses  to 
be  taken  out  and  forbade  the  occupation  until  the  fee  was  paid. 
The  present  Act,  as  in  1898,  here  imposes  special  taxes,  and  the 
last  paragraph  of  section  4,  infra,  prohibits  the  business  under 
penalty.  The  civil  war  license  taxes  were  repealed  July  14, 
1870  (16  Stat.  256).  The  special  taxes  of  the  Spanish  war  tax 
were  repealed  April  12,  1902   (32  Stat.  96). 

The  earlier  "  license  "  became  a  "  special  tax  "  in  1866,  ch.  184. 

Special  taxes  are  assessed  on  July  1st  for  the  next  fiscal  year. 
As  the  Act  contemplates  retaining  its  emergency  taxes  only 
until  the  end  of  1915,  they  are  to  be  collected  pro  rata  for  the 
period  when  the  Act  is  in  force. 

See  section  23,  post,  as  to  records  required  to  be  kept  and 
returns  made;  and  as  to  penalty  of  double  tax. 

The  origin  of  all  our  modern  licensing  acts  may  be  traced  to 
the  time  of  Edward  VI  (1547-1553)  when,  "  to  take  away  tempta- 
tions to  idleness "  and  check  vagrancy,  two  sessions  justices 
were  empowered  to  grant  licenses  to  ale  and  tippling  houses. 
Stat.  5  and  6  Edward  VI,  c.  25;  Reeves'  Hist,  of  English  Law 
(Finlason  edition),  v.  5,  p.  36. 

Samuel  Johnson,  in  his  great  dictionary,  defines  excise  as, 
"'  a  hateful  tax  levied  upon  commodities,  and  adjudged  not  by 
the  common  judges  of  property,  but  wretches  hired  by  those  to 
whom  excise  is  paid."  He  has  in  mind  the  old  "  farming  out " 
systems.  His  illustrative  quotations  squint  at  the  special  taxes 
of  1914,  §  3,  and  Schedule  B. 
^'  Excise. 

"  With  hundred  rows  of  teeth  the  shark  exceeds,  and  on  all 
trades  like  cassawar  she  feeds." — Marvel. 

"Ambitious  now  to  take  excise  of  a  more  fragrant  paradise." — 
-Cleaveland. 


THE  WAR  REVENUE  LAW.  23 

As  to  the  special  taxes  which  are  a  part  of  the  permanent  tax 
system,  or  at  least  were  on  the  statutes  when  the  present 
emergency  act  was  passed,  see  ante. 

Section  23,  post,  extends  all  existing  laws  of  this  sort  so  far 
as  applicable,  to  the  new  special  taxes. 

The  principal  general  provisions  of  the  Revised  Statutes  are: 

Occupation  not  to  be  carried  on  until  tax  paid  (3232) ;  busi- 
ness to  be  registered  (3233) ;  partners  at  the  same  place  pay 
only  a  single  tax  (3234) ;  payment  of  one  tax  does  not  cover  sev- 
eral places  of  business  (3235) ;  when  one  person  has  more  than 
one  occupation  a  tax  must  be  paid  for  each  (3236) ;  the  tax  is 
due  on  July  first,  being  annual,  but  apportioned  pro  rata  for 
shorter  periods  (3237) ;  to  be  paid  by  stamps  (3238) ;  the  tax 
stamp  to  be  conspicuously  exposed  (3239);  each  collector  to 
keep  a  public  list  and  to  certify  a  copy  to  any  public  prosecutor 
on  requisition  (3240) ;  in  case  of  death  or  removal  after  payment, 
business  may  be  carried  on  without  a  new  tax  (3241) ;  payment 
does  not  authorize  any  violation  of  State  law;  the  special  taxes 
are  imposed  on  brewers,  manufacturers  of  stills,  rectifiers,  re- 
tail liquor  dealers,  wholesale  liquor  dealers;  retail  dealers  in 
malt  liquors,  wholesale  dealers  in  malt  liquors;  manufacturers 
of  oleomargarine,  wholesale  dealers  in  oleomargarine,  retail 
dealers  in  oleomargarine,  manufacturers  of  process  or  renovated 
butter,  dealers  in  adulterated  butter,  manufacturers  of  filled 
cheese,  wholesale  dealers  in  filled  cheese,  retail  dealers  in  filled 
cheese,  manufacturers  and  packers  of  mixed  flour  (3244,  as 
amended). 

Special  occupation  taxes  are  constitutional.  (1866)  License 
Tax  Cases,  5  Wall.  462;  (1900)  American  Sugar  Ref.  Co.  v. 
Louisiana,  179  U.  S.  89,  45  L.  Ed.  102;  (1901)  W.  W.  Cargill  Co.  v. 
Minnesota,  180  U.  S.  452  (grain  warehouse) ;  (1905)  Cook  v. 
Marshall  Co.,  196  U.  S.  261,  45  L.  Ed.  619  (cigarette) ;  (1906) 
Armour  Packing  Co.  v.  Lacy,  200  U.  S.  226,  50  L.  Ed.  451  (meat 
packers) ;  (1909)  Southern  Oil  Co.  v.  Texas,  217  U.  S.  114,  54  L. 
Ed.  688   (oil  and  coal). 

Constitutionality  is  presumed.  (1895)  Hooper  v.  California, 
155  U.  S.  648,  39  L.  Ed.  297   (insurance). 

They  are  to  be  reasonably  and  fairly  construed.  (1900)  De 
Bary  v.  Souer,  101  Fed.  Rep.  425;  (1911)  Sesnon  v.  U.  S.,  182  Fed. 


24  THE  WAR  REVENUE  LAW. 

Rep.  573,  220  U.  S.  609.    And  see  notes  on  construction  at  §  23, 
post. 

It  was  the  province  of  the  States  to  license,  and  the  earlier 
use  of  the  word  license  in  the  federal  legislation  led  to  con- 
fusion. The  designation  "  special  tax,"  has  been  used  since 
1866,  July  13  (14  Stat.  4).  Even' under  the  Acts  of  1862  and 
1864  the  license  was  nothing  more  than  a  tax  receipt.  (1866) 
License  Tax  Cases,  5  Wall.  462  (lottery);  (1866)  Pervear  v. 
Commonwealth,  5  Wall.  475  (liquor) ;  (1865)  McGuire  v.  Com- 
monwealth, 3  Wall.  387  (liquor) ;  (1865)  Commonwealth  v.  Hol- 
brook,  10  Allen,  200  (liquor) ;  (1867)  State  v.  Delano,  54  Me.  501 
(liquor) ;  (1864)  U.  S.  v.  Riley,  5  Blatchf.  204  (liquor)  ;  (1894) 
Plumley  v.  Mass.,  155  U.  S.  461  (oleomargarine). 

Privilege  or  occupation  taxes  have  from  the  earliest  times 
been  popular  (it  would  be  better,  perhaps,  to  say  common) 
sources  of  revenue  in  the  Southern  States;  and  the  reports  of 
the  State  courts  contain  much  reasoning  which  will  be  found 
to  apply  to  Federal  legislation  on  the  same  subjects.  (1848) 
Simmons  v.  State,  12  Mo.  268  (State  tax  on  lawyers) ;  (1847) 
Carroll  v.  Mayor,  12  Ala.  173  (city  tax  on  auctioneers) ;  (1856) 
Portland  v.  O'Neill,  1  Oreg.  218  (city  tax  on  brokers);  (1857) 
Gunter  v.  Leckey,  30  Ala.  591  (State  tax  on  slave  traders) ; 
(1872)  St.  Louis  v.  Laughlin,  49  Mo.  559  (on  professions) ; 
(1876)  State  v.  Johnson,  65  Me.  362  (innkeeper);  (1879)  Ex 
parte  City,  re  Knox,  64  Ala.  463  (city  tax  on  lawyers). 

The  District  of  Columbia  has  an  elaborate  scheme  of  occu- 
pation or  license  taxes,  imposed  by  Congress.  Act  of  July  1, 
1902,  c.  1352  (32  Stat.  622). 

Revised  Statutes,  section  3243,  expressly  says  that  the  pay- 
ment of  a  Federal  special  tax  shall  not  authorize  any  violation 
of  a  State  law,  nor  prohibit  the  imposition  of  State  taxes.  See, 
also.  Act  of  July  1,  1862,  c.  119  (12  Stat.  432),  §  67;  June  30, 
1864,  c.  173  (13  Stat.  223),  §  81;  and  July  13,  1866,  c.  184  (14 
Stat.  98).     (1909)  Ohio  v.  Kendle,  8  O.  N.  P.  N.  S.  109. 

State  and  local  occupation  taxes  must  not  interfere  with 
interstate  commerce.  (1914)  Browning  v.  Waycross,  U.  S.  Su- 
preme Ct,  Oct.  T.,  1913.  Nor  with  foreign  commerce.  (1914) 
Sault  Ste.  Marie  v.  International  Transit  Co.,  U.  S.  Supreme 
Ct.,  Oct.  T.,  1913. 


THE  WAR  REVENUE  LAW.  25^ 

No  State  may  hinder  or  burden  the  Federal  government  in 
the  lawful  exercise  of  the  latter's  taxing  power.  (1910)  Fla- 
herty V.  Hanson,  215  U.  S.  515,  54  L.  Ed.  307,  and  cases  cited, 
p.  524. 

A  State  privilege  tax  on  telegraph  companies  which  does  not 
exempt  Federal  business  is  unconstitutional.  (1912)  Williams 
V.  Talladega,  226  U.  S.  404,  57  L.  Ed.  275,  reversing  164  Ala.  633. 

State  privilege  taxes  may  be  both  for  revenue  and  for  regula- 
tion, and  are  limited  only  by  "due  process  "  and  the  14th  amend- 
ment. (1913)  Bradley  v.  Richmond,  227  U.  S.  477,  57  L.  Ed. 
603  (private  banking) ;  (1900)  Gundling  v.  Chicago,  177  U.  S.  183, 
44  L.  Ed.  725  (cigarettes) ;  (1913)  Citizens'  Telephone  v.  Fuller, 
229  U.  S.  322,  57  L.  Ed.  1206;  (1914)  Ohio  Tax  Cases,  232  U.  S. 
576  (railways). 

A  State  (Florida)  may  not  impose  an  arbitrary  and  burden- 
some license  tax.  State  and  county,  on  merchants  using  any  form 
of  profit-sharing  coupons.  (1913)  Van  Deman  &  Lewis  Co.  v. 
Rast,  214  Fed.  Rep.  827. 

City  ordinances  imposing  an  unreasonable  license  system  on 
expressmen,  trucltmen,  hackmen,  etc.,  held  unconstitutional. 
(1914)  Adams  Express  Co.  v.  New  York,  232  U.  S.  14. 

As  to  whether  and  what  contracts  may  be  enforced  in  de- 
fault of  required  license.  Benjamin  on  Sales  (Bennett's  7th 
Ed.),  Bk.  3,  ch.  3,  esp.  §  538;  Bishop  on  Contracts,  ch.  XVIII. 

Many  of  the  cases  generally  cited  turn  upon  express  statu- 
tory language  or  express  terms  of  contracts  rather  than  on  any 
principle.  (1869)  Hall  v.  Bishop,  3  Daly,  109  (lawyer);  (1871) 
Tedrick  v.  Hiner,  61  111.  189,  38  L.  R.  A.  145  (lawyer);  (1871) 
Woodward  v.  Stearns,  10  Abb.  Pr.  (N.  S.)  395  (broker,  with  ex- 
press contract) ;  (1873)  Holt  v.  Green,  73  Pa.  200  (commercial 
broker);  (1871)  Larned  v.  Andrews,  lOG  Mass.  435  (merchant); 
(1874)  Ruckman  v.  Bergholz,  37  N.  J.  L.  437  (real  estate  agent) ; 
but  cf.  (1892)  Buckley  v.  Hamason,  50  Minn.  195,  16  L.  R.  A.. 
423;  (1885)  Pollard  v.  Phoenix  Ins.  Co.,  63  Miss.  244,  where 
failure  to  have  a  merchant's  license  invalidated  fire  policy  on 
goods;  Cf.  (1871)  Larned  v.  Andrews,  106  Mass.  435  (a  mer- 
chant under  Act  of  1864,  c.  173,  §  79) ;  (1869)  Aiken  v.  Blaisdell, 
41  Vermont,  655  (sale  of  liquor  across  State  line  to  evade  prohi- 
bition);   (1845)  Smith  v.  Mawhood,  14  M.  &  W.  452  (tobacco). 

An   express   company   was,  because  of  a  special   method  of 


26  THE  WAR  REVENUE  LAW. 

handling  shipments,  held  to  pay  a  special  tax  as  a  liquor  dealer, 
though  it  never  owned  the  beer  sold.  (1905)  Western  Exp.  Co. 
V.  U.  S.,  141  Fed.  Rep.  28. 

The  ordinary  C.  O.  D.  shipments  do  not  make  the  carrier 
liable.  (1902)  U.  S.  v.  Adams  Exp.,  119  Fed.  Rep.  240;  though 
the  shipper  may  be  required  to  have  a  license  for  the  place  of 
delivery.     (1885)  23  Fed.  Rep.  134. 

As  to  what  constitutes  carrying  on  a  business.  (1898)  Led- 
better  v.  U.  S.,  170  U.  S.  610;  (1886)  U.  S.  v.  Rennecke,  28  Fed. 
Rep.  847;   (1875)  U.  S.  v.  Jackson,  1  Hughes,  531. 

Where  special  taxes  vary  with  the  amount  of  business  done, 
and  a  person  has  paid  a  higher  tax,  he  may,  on  establishing 
his  right  to  a  lower  classification,  recover  the  excess  paid. 
(1877)  U.  S.  V.  Kaufman,  96  U.  S.  567.     See  §  3426,  R.  S. 

A  wife  may  continue  a  husband's  business  without  paying  a 
new  tax.     T.  D.  19026,  19411,  of  1898. 

A  stockholder  of  a  company  may  not  continue  busines,  as  in 
the  case  of  a  partnership,  after  dissolution.  T.  D.  45,  Feby.  17, 
1900. 

Under  the  Act  of  1864  one  professional  license  did  not  suffice 
for  a  firm.  Collection  of  Circulars,  1871,  pp.  156,  158;  Special 
No.  4,  July  30,  1864. 

Where  a  brewer's  tax  was  paid  by  a  firm,  it  was  not  necessary 
for  the  partner  who  continued  after  dissolution  to  pay  again. 
(1889)  U.  S.  V.  Davis,  37  Fed.  Rep.  468;  (1878)  U.  S.  v.  Glab, 
99  U.  S.  225;    (1867)   Spielman  v.  State,  27  Md.  520. 

A  business  tax  is  to  be  assessed  where  the  business  is  carried 
on  and  not  at  the  residence.  (1871)  Bates  v.  Mobile,  46  Ala.  158; 
(1863)  Miner  v.  Fredonia,  27  N.  Y.  155. 

As  to  sales  made  away  from  the  place  of  business,  see  (1901) 
U.  S.  V.  Chevallier,  107  Fed.  Rep.  434;  (1909)  De  Bary  v.  Dunne, 
172  Fed.  Rep.  940. 

But  one  liquor  license  covers  any  number  of  bars  on  the 
same  premises.    T.  D.  142,  June  2,  1900;  169,  June  29,  1900. 

By  an  executive  order,  dated  Oct.  13,  1914,  an  interesting 
scheme  of  occupation  or  license  taxation  was  established  for  the 
Canal  Zone.  The  special  license  taxes  include  "  dance,"  "  hand 
organ,"  "  fortune  telling  device,"  "  cane  rack,"  "  doll  rack," 
"  merry-go-round,"  "  trick,  riders,"  "  peddler,"  etc. 


THE  WAR  REVENUE  LAW.  27 

FIRST.— Bankers. 

This  paragraph  is  only  slightly  altered  from  the  corresponding 
provision  of  the  Act  of  1898,  June  13,  c.  448,  30  Stat.  448,  §  2, 
subd.  1,  and  Act  of  1901,  March  2,  c.  806,  31  Stat.  938,  §  2.  subd.  1; 
repealed  by  Act  of  April  12,  1902,  c.  500,  32  Stat.  96.  See,  also. 
Act  of  June  30,  1864,  c.  173,  13  Stat.  223,  §  79,  subd.  1,  amended 
by  Act  of  July  13,  1866,  c.  184,  14  Stat.  98.  §  9;  and  Act  of  July  1, 
1862,  c.  119,  12  Stat.  432,  §  64,  subd.  1. 

The  definition  of  a  banker  here  given  is  that  of  R.  S.  §  3407  (in 
connection  with  tax  on  circulation).  (1876)  Selden  v.  Equitable 
Trust  Co.,  94  U.  S.  419;  (1875)  Warren  v.  Shook,  91  U.  S.  704; 
(1884)  U.  S.  V.  Bank  of  Montreal,  21  Fed.  Rep.  236;  (1866)  U.  S. 
V.  Farmers*  L.  &  T.  Co.,  25  Fed.  Cas.  No.  15070. 

Having  a  place  of  business,  buying  and  selling  stocks  for  cus- 
tomers, as  a  business,  and  using  capital  in  this  business,  con- 
stituted a  man  a  banker.  (1890)  Richmond  v.  Blake,  132  U.  S. 
592. 

"  Having  a  place  of  business  where  deposits  are  received  and 
paid  out  on  checks,  and  where  money  is  loaned  upon  security, 
is  the  substance  of  the  business  of  a  banker."  Warren  v.  Shook, 
supra. 

For  definition  of  banker,  see  (1872)  Oulton  v.  Savings  Inst., 
17  Wall.  118. 

Capital  under  the  Act  of  1864  did  not  include  surplus  earn- 
ings. (1866)  Mechanics,  etc..  Bank  v.  Townsend,  5  Blatchf. 
315;    (1906)  Merchants'  N.  Bk.  v.  U.  S.,  42  Ct.  Cls.  6. 

The  Act  of  1872,  June  6,  c.  315,  17  Stat.  256,  interpreted 
"  capital  employed." 

"  Capital "  was  held  not  to  include  money  temporarily  bor- 
rowed by  a  banker  in  the  ordinary  course  of  his  business  to  meet 
an  emergency,  but  "  the  property  taken  from  other  investments 
or  uses  and  set  apart  for  and  invested  in  the  special  business, 
and  in  the  increase,  proceeds  and  earnings  of  which  property 
beyond  expenditures  incurred  in  its  use,  consist  the  profits 
made  in  the  business."  (1874)  Bailey  v.  Clark,  21  Wall.  284. 
But,  under  the  Act  of  1898,  the  Commissioner  ruled  that  money 
borrowed  or  received  on  special  deposit  for  use  as  capital  was 
taxable  as  capital.  T.  D.  19783,  July  28,  1898;  20154,  Oct.  5, 
18PS;   20645,  January  27,  1899. 


28  THE  WAR  REVENUE  LAW. 

The  earlier  decisions  doubtless  led  to  the  insertion  in  the 
Act  of  1898  of  the  express  provision  for  including  surplus  with 
capital.  And  the  tendency  of  the  rulings  on  the  Act  of  1898  ta 
exclude  certain  undivided  profits  probably  caused  their  express 
inclusion  in  the  present  Act. 

By  the  Act  of  1866  there  was  a  tax  on  dividends  and  profits 
added  to  surplus.     (1873)  Dollar  Sav.  Bk.  v.  U.  S.,  19  Wall.  227. 

Surplus  means  all  of  assets  over  liabilities,  and  therefore  in- 
cludes undivided  profits.  (1902)  Leather  Mfrs.  Bk.  v.  Treaty 
116  Fed.  Rep.  774,  affirmed  (1904)   128  Fed.  Rep.  262. 

But,  under  the  Act  of  1898,  a  trust  company's  accumulated 
profits,  invested  in  securities,  were  not  part  of  the  capital  sur- 
plus. (1909)  Central  Trust  v.  Treat,  171  Fed.  Rep.  301;  (1911) 
185  Id.  760;  (1909)  Farmers'  L.  &  T.  v.  Treat,  171  Id.  302;  (1911) 
185  Id.  760. 

A  company  investing  its  capital  in  real  estate,  bonds  and 
mortgages  and  dealing  in  these  securities,  is  not  a  banker.  (1876) 
Selden  v.  Equitable  Trust,  94  U.  S.  419;  (1877)  Oregon,  etc.. 
Trust  V.  Rathbun,  5  Sawyer,  32. 

A  fidelity  and  deposit  company,  doing  a  banking  business 
solely  with  its  deposits,  and  having  its  capital  and  surplus  in- 
vested in  realty  and  securities,  was  ruled  to  pay  as  a  .bank  on 
the  entire  amount,  under  the  Act  of  1898.  T.  D.  21421,  July  25, 
1899;  cf.  Central  Trust  v.  Treat,  supra. 

Margins  left  with  stock  brokers  are  not  properly  check  ac- 
counts. (1874)  Clark  v.  Bailey,  12  Blatchf.  156,  affirmed  21 
Wall.  284;  but  the  question  raised  as  to  whether  such  a  broker 
may  not  make  banker's  loans  was  answered  by  T.  D.  21152, 
May  12,  1899 ;  a  broker  who  keeps  no  checking  accounts  and  who 
loans  on  stocks  only  in  the  sense  that  he  temporarily  supple- 
ments customers'  margins  to  carry  stocks  which  he  in  turn 
hypothecates  for  loans,  is  not  doing  a  banking  business,  even 
though  he  have  some  capital  engaged. 

On  default  of  a  proper  return  for  taxation,  the  collector  may 
summon  persons  and  books  for  examination  under  R.  S.  §  3173. 

An  attachment  may  issue  as  for  a  contempt  for  refusal  to  an- 
swer questions.  R.  S.  §  3175;  (1870)  In  re  Chadwick,  1  Lowell, 
439;  (1900)  In  re  Kinney,  102  Fed.  Rep.  468;  Landram  v.  U.  S.,  16 
Ct.  Cls.  74,  85;  Lippman's  case,  3  Ben.  95. 


THE  WAR  REVENUE  LAW.  29 

Examination  of  books  under  the  Act  of  18^4,  section  14,  was 
not  an  infringement  of  a  constitutional  right.  (1868)  In  re 
Lippmann,  3  Ben.  95;   (1871)  In  re  Strouse,  1  Sawyer,  605. 

Under  the  Act  of  1868,  July  20,  section  49,  an  officer  might 
examine  bankers'  and  brokers'  books  without  declaring  his  pur- 
pose.    (1870)  Stanwood  v.  Green,  2  Abb.  U.  S.  184. 

Cf.  §  23,  post,  as  to  records  required  to  be  kept,  returns  made, 
etc. 

Other  illustrative  Treasury  Decisions,  "  T.  D.,"  under  the 
Act  of  1898: 

(20114)  Sept.  28,  1898.  The  provision  for  estimating  the  tax 
on  the  basis  of  the  preceding  year  was  ruled  to  apply  only  to 
such  banks  as  had  previously  been  in  business,  leaving  a  new 
bank  to  pay  only  the  flat  tax.  An  Act  of  March  2,  1901,  amended 
the  paragraph  as  it  stood  in  1898  by  inserting,  "  In  the  case  of 
bankers  who  were  not  in  business  in  the  preceding  fiscal  year 
the  tax  shall  be  computed  on  the  capital  at  the  time  of  com- 
mencing business."  The  present  Act  restores  the  earlier  read- 
ing by  omitting  the  amendment  of  1901. 

(19758)  July  25,  1898;  (20114)  Sept.  28,  1898.  A  bank  begin- 
ning business  during  the  first  month  of  the  law's  operation  must 
make  return  and  pay  the  full  year's  tax;  at  any  later  time  dur- 
ing the  year,  pro  rata  for  the  remainder. 

(20336)  Nov.  16,  1898.  A  new  organization  by  the  same  per- 
sons during  the  year  is  taxable  as  a  new  bank. 

(20786)  March  2,  1899.  But  a  mere  change  of  name  does  not 
require  a  new  tax  to  be  paid. 

(20419)  Dec.  13,  1898.  Banks  which  have  separately  paid  the 
tax  and  are  subsequently  during  the  year  consolidated,  must 
pay  a  further  pro  rata  tax  for  the  remainder  of  the  year. 

(20723)  Feb.  18,  1899.  Where  a  banker  is  also  a  broker,  the 
value  of  a  seat  on  the  exchange  is  not  to  be  included  in  esti- 
mating the  banking  capital. 

A  State  bank  becoming  a  national  bank,  with  no  other  change, 
need  not  pay  a  new  tax.     T.  D.  123,  May  11,  1900. 

Lending  money  on  goods  and  chattels  is  not  banking.  T.  D. 
20344,  June  25,  1898.  And  see  (J.879)  New  Orleans  v.  Metrop. 
Loan,  31  La.  An.  310. 


30  THE  WAR  REVENUE  LAW. 

SECOND.— Brokers. 

Cf.  Act.  of  June'l3,  1898,  §  2,  par.  2;  March  2,  1901,  §  2,  par.  2^ 
repealed  April  12,  1902,  §  2;  June  30,  1864,  §  79,  par.  9,  amend, 
by  March  3,  1865,  and  July  13,  1866;  Act  of  July  1,  1862,  §  64, 
par.  13. 

This  tax  was  amended  out  of  the  Act  by  the  Senate,  presum- 
ably in  view  of  the  disturbance  of  the  brokerage  business  by 
the  long  closing  of  practically  all  exchanges,  a  measure  adopted 
to  avoid  a  threatened  crash  when  all  Europe  became  involved 
in  the  war  and  there  was  danger  of  "  dumping."  The  House 
prevailed  in  conference,  and  the  tax  was  restored. 

"  Ordinarily  the  term  '  broker '  is  applied  to  one  acting  for 
others;  but  the  part  of  the  definition  which  speaks  of  purchases 
and  sales  for  himself  is  equally  important  as  that  which  speaks 
of  sales  and  purchases  for  others.  All  parts  of  the  definitions 
are  qualified  by  the  words  '  whose  business  it  is.'  Thus,  if 
A.  B.  has  $10,000  which  he  desires  to  invest,  and  purchases 
United  States  stock,  or  State  stock,  or  any  other  securities,  he 
does  not  thereby  become  a  broker.  Nor  if  he  owns  $10,000  of 
U.  S.  stock  which  he  wishes  to  sell  to  raise  money  to  pay  his 
debts  or  because  he  is  not  satisfied  with  six  per  cent,  interest, 
is  he  thereby  made  a  broker.  It  is  only  when  making  sales 
and  purchases  is  his  business,  his  trade,  his  profession,  his 
means  of  getting  his  living  or  of  making  his  fortune,  that  he 
becomes  a  broker  within  the  meaning  of  the  statute.  Nor  is 
it  believed  that  a  sale,  by  one  doing  a  banking  business  only, 
of  a  security  received  by  him  for  the  repayment  of  a  legitimate 
loan,  would  make  him  a  broker  and  subject  to  the  tax.  This 
would  not  be  deemed  an  act  of  brokerage,  either  under  the 
statute  or  upon  general  principles,  of  law.  When  it  is  his  busi- 
ness the  statute  properly  holds  all  such  acts,  whether  in  the 
name  of  himself  ostensibly  or  in  the  name  of  others,  as  the 
acts  of  a  broker.  The  danger  and  the  facility  for  evasion  of 
the  statute  furnish  excellent  reasons  for  the  adoption  of  this 
provision."  (1875)  Warren  v.  Shook,  91  U.  S.  704,  710.  See 
(1893)  Jackson  v.  Hough,  38  W.  Va.  237. 

Persons  who  buy  and  sell  stocks,  etc.,  on  their  own  account 
were  held  brokers.  (1874)  U.  S.  v.  Cutting,  3  Wall.  441;  (1866) 
Clark  V.  Gilbert,  5  Blatchf.  330. 


THE  WAR  REVENUE  LAW.  31 

Brokers  doing  a  speculative  business  in  mining  stocks  on  their 
own  account  are  taxable,  though  they  do  no  commission  busi- 
ness for  others.     Treas.  Dec.  (19562)  June  23,  1898. 

A  note  broker  is  taxable,  though  operating  only  for  his  own 
account.  Treas.  Dec.  (19692),  July  14,  1898;  (20549)  Jany.  16, 
1899. 

Bankers  who  buy  and  sell  government  securities  for  them- 
selves are  not  brokers.     (1874)  U.  S.  v.  Fisk,  3  Wall.  445. 

But  bankers  acting  also  for  others  are  brokers.  11  Opin. 
Atty.-Gen.  482. 

Mere  inactive  membership  in  a  mining  or  stock  exchange  does 
not  involve  the  tax.  T.  D.  (19567)  June  24,  1898.  But  an  inac- 
tive member  who  operates  through  another  active  member  and 
splits  commissions  is  liable.     T.  D.  (19943)  Aug.  24,  1898. 

The  mere  lending  of  money  for  others,  where  the  borrower 
pays  a  commission,  is  not  taxable  as  a  brokerage  business. 
T.  D.  (19894)  Aug.  16,  1898. 

Country  merchants  who  occasionally  lend  money  on  notes  or 
mortgages  are  not  brokers.     T.  D.  (19940)  Aug.  23,  1898. 

A  land  agent  who  also,  as  a  material  part  of  his  business, 
buys  notes  for  himself  and  others,  is  a  taxable  broker.  T.  D. 
(19757)  July  25,  1898;    (20028)   Sept.  8,  1898. 

The  mere  incidental  negotiating  of  mortgage  loans  by  a  person 
having  another  regular  business  does  not  constitute  him  a 
broker.  T.  D.  (19872)  Aug.  10,  1898;  (20262)  Oct.  27,  1898; 
(20544)  Jany.  11,  1899. 

But  one  who,  as  agent  for  others,  makes  a  business  of  nego- 
tiating the  sale  of  mortgages  on  commission  is  a  broker.  T.  D. 
(20676)  Feb.  4,  1899. 

Lending  money  on  mortgage  is  not  taxable  as  brokerage,  but 
the  business  of  selling  mortgage  securities  so  taken  requires 
a  broker's  tax  to  be  paid.    T.  D.  (21620)  Sept  22,  1899. 

A  broker's  agent  operating  in  another  place  than  the  main 
office,  transmitting  orders  and  remitting  money  to  his  prin- 
cipal, is  taxable  as  a  broker.  T.  D.  (19881)  Aug.  10,  1898; 
(19615)  July  1,  1898. 

In  Circular  No.  508,  Aug.  8,  1898,  T.  D.  (19843),  it  was  ruled 
that  no  tax  was  required  for  a  broker's  branch  having  a  clerk 
who  merely  received  and  transmitted  orders.  This  was  intended 
to  apply  only  to  certain  small  offices  such  as  some  of  these 


32  THE  WAR  REVENUE  LAW. 

maintained  in  hotel  lobbies,  and  the  Commissioner  later  issued 
two  circulars  carefully  prescribing  the  exception  and  requiring 
a  tax  on  every  branch  office  having  the  paraphernalia  of  a 
broker's  office.  T.  D.  (20374)  Nov.  25,  1898;  (20604)  Jany.  23, 
1899. 

Cf.  Liquor  dealer  cases  where  a  branch  was  not  a  separate 
concern.  (1900)  U.  S.  v.  Chevallier,  102  Fed.  Rep.  125;  107 
id.  434;  but  see,  also,  liquor  case;  (1909)  De  Bary  v.  Dunne,  172 
Fed.  Rep.  940. 

The  mere  purchase  of  county,  school  and  State  orders  at  a 
discount  was  first  ruled  not  to  constitute  a  man  a  broker.  T.  D. 
(19885)  Aug.  11,  1898.  But  this  was  later  modified  to  require 
a  tax  of  anyone  who  made  a  business  of  buying  such  warrants 
and  fee  bills  of  witnesses.  Appendix  to  Vol.  I  of  the  Compila- 
tion of  Decisions  (1899);  (21647)  Oct.  10,  1899.  "It  is  only 
when  making  sales  and  purchases  as  his  business,  his  trade, 
his  profession,  his  means  of  getting  his  living  or  making  his 
fortune,  that  he  becomes  a  broker  within  the  meaning  of  the 
statute."     (1875)  Warren  v.  Shook,  91  U.  S.  704. 

The  rulings  on  what  constitutes  the  selling  of  exchange  are 
not  a  sure  guide,  inasmuch  as  the  questions  often  obviously 
make  an  imperfect  statement  of  the  facts.  General  inquiries 
were  answered  to  the  effect  that  all  selling  of  exchange  was 
taxable,  and  special  efforts  were  made  to  enforce  the  law  against 
express  companies  and  others  which  competed  with  banks. 
T.  D.  (20593-20594)  Jany.  19,  1899;  (20717)  Feb.  14,  1899;  (20785) 
March  1,  1899;  (20790)  March  6,  1899;  (21075)  April  28,  1899; 
(21709)   Oct.  31,  1899. 

But  a  steamship  company  which  sold  its  checks  to  be  sent 
abroad  and  individuals  who  occasionally  sold  their  own  checks 
or  drafts  were  not  taxed.  T.  D.  (20026)  Sept.  8,  1898;  (20365) 
Nov.  21,  1898;  (19937)  Aug.  23,  1898;  (21286)  June  20,  1899. 
The  question  turns  on  what  is  exchange  and  the  extent  to 
which  the  transactions  are  a  material  part  of  the  business. 
See  A.  G.  O.  XXIII,  139,  as  to  express  companies'  money  order 
business. 

A  broker  doing  business  in  both  stocks  and  grain  or  produce 
must  pay  a  special  tax  in  each  capacity.  T.  D.  (19870)  Aug.  9, 
1898;  (19998)  Sept.  1,  1898;  (20167)  Oct.  11,  1898;  (21607)  Sept. 
14,  1899. 


THE  WAR  REVENUE  LAW.  33 

Where  a  broker  who  has  paid  the  tax  goes  into  a  partnership 
during  the  year,  the  new  firm  must  also  pay  pro  rata  for  the 
year,  without  rebate  to  the  man  who  paid  individually,  T.  D. 
(20160)  Oct.  10,  1898.  It  was,  however,  ruled  that  where  one 
partner  continued  a  liquor  business  of  a  dissolved  firm,  taking 
in  no  new  partner,  he  did  not  require  to  pay  again.  T.  D. 
(20346)  Nov.  19,  1898. 

A  person  who  buys  and  deals  in  life  insurance  contracts  to 
the  extent  of  making  a  business  of  it  is  dealing  in  securities 
and  is  a  broker.     T.  D.  (20235)  Oct.  22,  1898. 

A  railway  agent  near  a  frontier  who  in  the  regular  course  of 
business  exchanges  American  and  foreign  money  is  not  a  broker. 
T.  D.  (21521)  Aug.  22,  1899. 

A  broker  who  buys  and  sells  stocks  in  his  own  name  on 
margin  for  another  person  and  at  the  latter's  risk,  was  a  broker 
under  the  Act  of  June  30,  1864,  §  99.  (1872)  Northrup  v.  Shook, 
10  Blatchf.  243: 

As  to  brokerage  under  a  State  license  law  (1885)  State  v. 
Duncan,  16  Lea.  Tenn.  75;    (1893)  Jackson  v.  Hough,  supra. 


THIRD.— Pawnbrokers. 

This  paragraph  may  be  traced  through  the  Act  of  July  1,  1862, 
c.  119,  12  Stat.  432,  §  64,  subd.  7;  Act  of  June  30,  1864,  c.  173, 
13  Stat.  223,  §  79,  subd.  10;  Act  of  July  13,  1866,  c.  184,  14  Stat. 
98,  §  9;  Act  of  June  13,  1898,  c.  448,  30  Stat.  448,  §  2,  subd.  3; 
Act  of  March  2,  1901,  c.  806,  31  Stat.  938,  §  2,  subd.  3,  repealed 
by  Act  of  April  12,  1902,  c.  500,  32  Stat.  96.  §  2. 

The  tax  in  1898  was  $20. 

A  pawnbroker  does  not  evade  or  avoid  the  tax  by  buying 
articles  without  issuing  tickets  but  with  a  verbal  agreement  to 
resell.     Treas.  Decis.  Dec.  15,  1898  (20439). 

An  occasional  transaction  in  the  nature  of  a  loan  on  a  pledge 
does  not  constitute  pawnbroking.  Treas.  Decis.  Aug.  8,  1898 
(19843). 

An  earlier  ruling  making  pawn  tickets  liable  to  stamp  tax  as 
warehouse  receipts  was  revoked  or  modified  to  apply  only  to 
cases  where  the  deposit  was  clearly  as  a  pledge  and  not  for  stor- 
age.    Treas.  Decis.  Aug.  23,  1899  (21524). 


34  THE  WAR  REVENUE  LAW. 

A  State  banking  license  did  not  cover  pawnbroliing.  (1879) 
New  Orleans  v.  Metrop.  Loan,  31  La.  An.  310. 

A  pawnbroker's  ticket  or  check  under  a  California  statute 
required  a  stamp  under  the  Act  of  1864.  (1870)  U.  S.  v.  Smithy 
1  Saw.  192. 

Lending  money  on  warehouse  receipts,  without  getting  pos- 
session of  the  goods,  is  not  pawnbroking.  T.  D.  198,  Aug.  15,. 
1900. 


FOURTH.^Commercial  Brokers. 

This  paragraph  is  practically  as  it  had  teen  in  the  earlier 
Acts  of  1862  (12  Stat.  713) ;  1864  (13  Stat.  223) ;  1866  (14  Stat. 
471);  1898  (30  Stat.  448);  repealed  by  1901  (31  Stat.  938). 

This  was  the  first  of  the  1898  special  taxes  to  be  repealed;  yet 
the  finance  chairman  of  the  Senate,  in  insisting  upon  its  reim- 
position  here,  twice  stated,  as  an  argument,  that  it  had  remained 
to  the  end  in  the  Spanish  war  emergency  taxation.  He  owned 
that  the  field  of  the  broker's  activities  was  "  right  broad,"  but 
estimated  there  were  only  about  12,000  taxable  brokers  of  this 
class. 

A  chief  difficulty  in  applying  it  successfully  has  always  been 
that  many  transactions  of  the  class  sought  to  be  embraced  were 
not  really  such  as  properly  could  be  included  among  brokers' 
operations.  The  form  of  language  used  does  not  cover  mer- 
chants as  such.  A  broker,  properly  speaking,  only  negotiates  a 
sale;  he  does  not  actually  sell,  as  a  merchant  does. 

A  commission  merchant  or  factor  may  operate  in  his  own 
name  and  he  gets  possession  of  the  thing  sold.  A  broker  ordi- 
narily does  neither.  Where  men  made  sales  on  commission  in 
their  own  names,  at  their  own  store,  had  the  goods  and  shipped 
them  to  customers,  they  were  commission  merchants,  not 
brokers.  (1874)  Slack  v.  Tucker,  23  Wall.  321,  reversing  1 
Holmes,  485   (under  Act  of  1864). 

While  the  present  Act  was  in  the  Senate  the  point  above  men-^ 
tioned  was  met  by  adding  a  new  paragraph  to  the  section  and 
taxing  commission  merchants  as  such.  See  §  3,  subd.  tenth, 
post,  and  notes. 

The  Act  of  1866,  July  13,  c.  184.  14  Stat.  98,  §  9,  did  not  apply 


THE  WAR  REVENUE  LAW.  35 

to  brokers  who  made  purchases,  but  to  those  who  made  sales. 
(1872)  Stockdale  v.  Doswell,  16  Wall.  156. 

A  State  tax  on  the  business  of  real  estate  broker  is  constitu- 
tional.    (1873)  Wiltse  v.  State,  8  Heisk.  (Tenn.)  544. 

But  real  estate  brokers,  as  such,  were  not  deemed  covered  by 
the  Act  of  1898.     T.  D.  19755,  July  23,  1898. 

Under  the  Act  of  1866  a  market  gardener  selling  his  products 
from  his  wagon  in  the  city  market  was  held  a  produce  broker. 
(1870)  U.  S.  V.  Simons,  1  Abb.  470,  7  Phila.  607. 

Occasional  transactions  in  cattle  by  a  farmer  do  not  make  him 
a  broker.     (1867)  U.  S.  v.  Kenton,  2  Bond,  87. 

Members  of  a  board  of  trade  who  are  "  scalpers  or  specula- 
tors," operating  solely  for  themselves,  are  not  commercial 
brokers.  The  words,  "  for  themselves  or  others,"  in  the  para- 
graph regarding  stock  brokers  are  not  found  in  this  paragraph. 
T.  D.  Oct.  14,  1898  (20198). 

A  salesman  travelling  at  his  own  expense  taking  and  for- 
warding orders  to  various  makers  for  cigars  sold  on  sample  is 
a  commercial  broker.    T.  D.  June  27,  1898  (19575). 

A  woman  who  does  "  shopping "  for  others  and  gets  a  dis- 
count for  her  trouble  is  not  a  broker;  "  installment  purchasers," 
however,  who  do  not  handle  the  goods  but  maintain  a  credit 
in  stores  against  which  their  customers  make  direct  purchases, 
are  taxable.     T.  D.  Aug.  10,  1898  (19884). 

If  diamonds  on  memorandum  are  obtained  on  credit  and  sold 
by  the  dealer  for  his  own  account,  it  is  not  brokerage;  but  if  the 
business  is  really  a  selling  of  the  consignor's  goods  on  com- 
mission it  is  taxable.     T.  D,  Oct.  11,  1898   (20164). 

The  mere  selling  of  steamship  passage  tickets  is  not  such 
negotiation  of  business  for  the  owners  of  vessels  as  to  make  the 
agent  a  broker.     T.  D.  Feb.  14,  1899   (20717-20718). 

See  T.  D.  20725,  under  subd.  fifth,  infra. 

It  was  intimated  in  Congress  that  many  brokers,  to  encourage 
business,  would  also  pay  the  stamp  tax  on  the  sale  agreements 
negotiated  by  them. 

Cf.  State  cases.  (1873)  Blackford  v.  State,  8  Heisk.  (Tenn) 
538  (real  estate  broker) ;  (1872)  State  v.  Field,  49  Mo.  270 
(broker);  (1884)  Braun  v.  Chicago,  110  111.  186  (brokers). 

A  State  tax  of  $25  a  week  on  all  drummers  not  having  a  li- 
censed business  in  the  taxing  district,  exceeded  the  right  of  the 


36  THE  WAR  REVENUE  LAW. 

State  to  license  vocations  within  its  own  borders.     (1886)  Rob- 
bins  V.  Shelby  County,  120  U.  S.  489. 


FIFTH.— Custom  House  Brokers. 

Act  of  June  30,  1864,  c.  173,  13  Stat.  223,  §  79,  subd.  15;  July 
13,  1866,  c.  184,  14  Stat.  98,  §  9;  June  13,  1898,  c.  448,  30  Stat.  448, 
§  2,  subd.  5;  March  2,  1901,  c.  806,  31  Stat.  938,  §  2,  subd.  4, 
repealed  by  April  12,  1902,  c.  500,  32  Stat.  96,  §  2. 

Must  pay  tax  in  each  city  where  they  do  business,  i.  e.,  every 
branch  office  is  taxed.     R.  S.  §  3235;  T.  D.  19576,  June  27,  1898. 

A  bill  of  sale  of  a  vessel  is  a  "  custom  house  paper,"  but  a  law- 
yer who  occasionally  draws  one  is  not  a  broker.  T.  D.  20321, 
Nov.  12,  1898. 

T.  D.  20033,  Sept.  13,  1898,  answers  several  queries  on  this 
paragraph. 

"  Other  business  for  owners,"  under  subd.  fourth,  does  not 
permit  a  commercial  broker  to  arrange  entries,  etc.,  without 
paying  a  tax  as  a  custom  house  broker.  T.  D.  20725,  Feby.  20, 
1899. 


SIXTH.— Proprietors  of  Theatres,  etc. 

Cf.  Act  of  1862,  July  1,  c.  119,  §  64,  subd.  17,  12  Stat.  432; 
Act  of  1864,  June  30,  c.  173,  §  79,  subd.  37,  13  Stat.  223;  Act  of 
1866,  July  13,  c.  184,  §  9,  14  Stat.  98;  Act  of  1898,  June  13,  c. 
448,  §  2,  subd.  6,  30  Stat.  448;  Act  of  1901,  March  2,  c.  806,  §  2, 
subd.  5,  31  Stat.  938,  repealed  by  Act  of  1902,  April  12,  c.  500, 
§  2,  32  Stat.  96. 

The  House  bill  provided  a  flat  rate  for  theatres  in  cities  of  a 
certain  population,  as  was  the  method  in  the  Act  of  1898;  but  the 
Senate  made  a  classification  according  to  seating  capacity. 

It  had  been  held  that  the  "  proprietor "  of  a  still  was  the 
person  who  controlled  it,  i.  e.,  the  lessee,  not  the  lessor.  (1878) 
U.  S.  v.  Van  Slyke,  8  Diss.  227.  "  The  distiller,  owner,  or  person 
having  possession."  R.  S.  §  3251.  And  the  present  Act  follows 
the  Act  of  1898  in  requiring  payment  by  the  lessee  of  a  theatre. 

The  exception  here  (as  the  second  proviso  in  par.  8)  is  an 
attempted   expression   of  the  liberal  spirit  in  which  such  tax 


THE  WAR  REIVENUE  LAW.  37 

laws  have  always  been  enforced  as  to  church,  school,  lodge, 
grange,  lyceum  and  all  purely  educational,  social,  religious  and 
charitable  entertainments  under  non-money-making  manage- 
ment. 

Many  halls  pompously  called  theatres  will  escape  this  tax  and 
fall  under  par.  8;  but  the  larger  theatres  properly  so  called 
which  have  latterly  been  given  over  chiefly,  though  not  ex- 
clusively, to  "movies"  and  "varieties,"  will  doubtless  be  left  in 
tijis  class. 


SEVENTH.— Circuses. 
EIGHTH.— Other  Exhibitions. 

1862,  c.  119,  July  1,  §  64,  subd.  18;  1864,  c.  173,  June  30,  §  79, 
subd.  38;  1866,  c.  184,  July  13,  §  9;  1898,  c.  448,  June  13,  §  2, 
subd.  7  and  8;  1901,  c.  806,  March  2,  §  2,  subd.  6  and  7;  1902,  c. 
500,  April  12,  §  2,  repeal. 

A  circus  is  pretty  well  defined  in  general  acceptance  of  lan- 
guage; and,  in  the  spirit  of  the  exceptions  in  paragraphs  6  and 
8,  it  is  not  likely  that  a  "  society  circus,"  or  tented  "  horse  play," 
will  be  taxed.  It  is  best  to  inquire  of  the  collector  or  Commis- 
sioner, but  it  would  appear  to  be  extremely  important,  in  such 
inquiry,  to  state  the  facts  adequately.  Many  rulings  in  the 
compilations,  even  where  they  are  replies  to  lawyers,  indicate 
that  unfavorable  decisions  were  called  out  by  carelessly  formu- 
lated questions. 

Ordinary  local  ball  games  were  not  assessed,  T.  D.  20228,  Oct. 
19,  1898;  but  professional  ball  in  its  larger  forms  undoubtedly 
will  be;  and  general  athletic  fields.     T.  D.  20190,  Oct.  12,  1898. 

Theatres  and  halls  used  as  cafes  with  vaudeville,  no  entrance 
fee  being  charged,  were  taxed.     T.  D.  132,  May  23,  1900. 

"  Cabaret "  shows  in  restaurants  and  variety  shows  in  beer 
halls  and  garden  cafes,  where  they  consist  in  anything  else  than 
bad  music,  will  be  included.  There  is  little  hope  that  the 
music  alone  will  attract  a  tax! 

A  citizens'  street  fair  was  not  assessed.  T.  D.  251,  Nov.  26, 
1900. 


38  THE  WAR  REVENUE  LAW. 

NINTH.— Bowling  Alleys,  etc. 

Cf.  1862,  c.  119,  12  Stat  432;  1864,  c.  173,  13  Stat.  223;  1866, 
c.  184,  14  Stat.  98;  1898,  c.  448,  30  Stat.  448;  1901,  c.  806,  31 
Stat.  938;  1902,  c.  500,  32  Stat.  96,  repeal. 

This  obviously  is  not  intended  to  apply  to  legitimate  private 
clubs. 

"Any  person  who  appears  to  be,  or  for  the  time  being  is,  in  the 
possession  and  control  of  a  place  or  building  where  a  billiard 
table  is  kept  for  public  use,  is  prima  facie  the  proprietor  of  a 
billiard-room  and  liable  to  pay  this  special  tax."  (1871)  U.  S. 
V.  Howard,  1  Sawyer,  507. 

A  safety  lynn  table  is  a  pool  table.    T.  D.  173,  July  6,  1900. 

A  tivoli  table  used  for  pool  or  billiards  requires  a  tax.  T.  D. 
205,  Aug.  28,  1900. 

A  tax  paid  for  bowling  alleys  does  not  cover  pool  tables  which 
are  substituted  for  the  alleys.    T.  D.  231,  Oct.  12,  1900. 

Tables  called  Klondike,  Stevens,  and  Manhattan,  and  peg 
pool  tables  are  included.    T.  D.  259,  Dec.  21,  1900. 

T£NTH.n-Commi88]on  Merchants. 

This  paragraph  is  new.  The  House  bill  (H.  R.  18891)  re- 
tained only  the  former  tax  on  commercial  brokers,  but  the  Sen- 
ate, on  the  special  recommendation  of  its  Finance  Committee 
(Report  No.  813)  added  this  new  classification  to  meet  the  rul- 
ings and  decisions  which  had  tended  to  exclude  a  large  class  of 
mercantile  agents.  The  after-thought  tacking  of  so  important 
a  measure  at  the  end  of  a  schedule  out  of  its  proper  place,  is 
a  characteristic  illustration  of  the  hasty  and  unreasoned  man- 
ner in  which  much  legislation  is  patched  together. 

Under  the  Act  of  1898  there  was  a  good  deal  of  contention  as 
to  what  constituted  the  business  of  a  mercantile  commercial 
broker.  Numerous  rulings  were  made  which  disclosed  no  real 
principle  until  December  12,  1898,  in  T.  D.  20417,  the  Commis- 
sioner made  a  settled  ruling  that  a  commercial  broker  was  one 
who,  without  being  an  exclusive  agent,  made  a  business  of  nego- 
tiating sales  or  purchases  for  others  on  commission  without 
acquiring  title  or  possession  of  the  goods. 

Mill  agents  who  receive  and  forward  orders,  making  their 


THE  WAR  REVENUE  LAW.  39 

own  bills  and  settlements  for  goods  which  are  shipped  direct 
from  the  mills  to  the  customers  are  brokers,  unless  they  are 
agents  exclusively  representing  certain  houses.  T.  D.  Aug.  23, 
1898  (19938);  Aug.  26,  1898  (19966);  Sept.  28,  1898  (20117);  Oct. 
11,  1898  (20168);  Oct.  12,  1898  (20189);  Oct.  25,  1898  (20241). 

Cf.  the  notes  on  paragraph  4  of  this  section.  Commercial 
brokers. 

CJonsignment  commission  merchants  (tobacco,  cotton,  cattle 
etc.)  and  commission  auctioneers  are  not  commercial  brokers 
where  they  get  actual  possession  of  the  things  they  sell  for  the 
owner.  T.  D.  July  27,  1898  (19766);  Oct.  11,  1898  (20164).  But 
negotiating  purchases  and  sales  without  consignment  to  the 
agent  who  merely  negotiates  on  a  commission  is  a  brokerage 
business.     T.  D.  Jany.  19,  1899  (20592). 

A  person  who  receives  goods  into  his  possession  and  sells  and 
delivers  them  on  commission  is.  It  appears,  not  to  be  regarded 
as  a  commercial  broker.  (1874)  Slack  v.  Tucker,  23  Wall.  321, 
reversing  1  Holmes,  485  (Act  of  1864) ;  T.  D.  Nov.  7, 1898  (20295), 
as  to  book  agent. 

The  Roman  tax  of  one  per  cent,  on  auction  sales,  Veetigal 
(centesima)  rerum  venalium,  in  the  reign  of  Augustus,  is  one  of 
the  earliest  known  excise  laws. 


TOBACCO  DEALERS  AND  MANUFACTURERS. 

Sec.  4.  That  on  and  after  November  first,  nineteen 
hundred  and  fourteen,  special  taxes  on  tobacco  deal- 
ers and  manufacturers  shall  be  and  hereby  are  im- 
posed annually  as  follows,  the  amount  of  such  annual 
taxes  to  be  computed  in  all  cases  on  the  basis  of  the 
annual  sales  for  the  preceding  fiscal  year : 

Dealers  in  leaf  tobacco  whose  annual  sales  or 
transfers  do  not  exceed  fifty  thousand  pounds  shall 
each  pay  $6.  Dealers  in  leaf  tobacco  whose  annual 
sales  or  transfers  exceed  fifty  thousand  and  do  not 
exceed  one  hundred  thousand  pounds  shall  pay  $12, 


40  THE  WAR  REVENUE  LAW. 

and  if  their  annual  sales  or  transfers  exceed  one 
hundred  thousand  pounds  shall  pay  $24 :  Provided, 
That  dealers  in  leaf  tobacco  whose  annual  sales  or 
transfers  do  not  exceed  one  thousand  pounds  shall 
be  exempt  from  the  tax  herein  imposed  on  dealers 
in  leaf  tobacco. 

Dealers  in  tobacco,  not  specially  provided  for  in 
this  section,  whose  annual  receipts  from  the  sale  of 
tobacco  exceed  $200,  shall  each  pay  $4.80  for  each 
store,  shop,  or  other  place  in  which  tobacco  in  any 
form  is  sold. 

Every  person  whose  business  it  is  to  sell,  or  offer 
for  sale,  manufactured  tobacco,  snuff,  cigars,  or 
cigarettes  shall  be  regarded  as  a  dealer  in  tobacco : 
Provided,  That  no  manufacturer  of  tobacco,  snuff, 
cigars,  or  cigarettes  shall  be  required  to  pay  a  special 
tax  as  a  dealer  in  manufactured  tobacco,  snuff, 
cigars,  or  cigarettes  for  selling  his  own  products  at 
the  place  of  manufacture. 

Manufacturers  of  tobacco  whose  annual  sales  do 
not  exceed  one  hundred  thousand  pounds  shall  each 
pay  $6. 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed one  hundred  thousand  and  do  not  exceed  two 
hundred  thousand  pounds  shall  each  pay  $12. 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed two  hundred  thousand  and  do  not  exceed  four 
hundred  thousand  pounds  shall  each  pay  $24. 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed four  hundred  thousand  and  do  not  exceed  one 
million  pounds  shall  each  pay  $60. 


THE  WAR  REVENUE  LAW.  41 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed one  million  and  do  not  exceed  five  million 
pounds  shall  each  pay  $300. 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed five  million  and  do  not  exceed  ten  million  pounds 
shall  each  pay  $600. 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed ten  million  and  do  not  exceed  twenty  million 
pounds  shall  each  pay  $1,200. 

Manufacturers  of  tobacco  whose  annual  sales  ex- 
ceed twenty  million  pounds  shall  each  pay  $2,496. 

Manufacturers  of  cigars  whose  annual  sales  do 
not  exceed  one  hundred  thousand  cigars  shall  each 
'pay  $3. 

Manufacturers  of  cigars  whose  annual  sales  ex- 
ceed one  hundred  thousand  and  do  not  exceed  two 
hundred  thousand  cigars  shall  each  pay  $6. 

Manufacturers  of  cigars  whose  annual  sales  ex- 
ceed two  hundred  thousand  and  do  not  exceed  four 
hundred  thousand  cigars  shall  each  pay  $12. 

Manufacturers  of  cigars  whose  annual  sales  ex- 
ceed four  hundred  thousand  and  do  not  exceed  one 
million  cigars  shall  each  pay  $30. 

Manufacturers  of  cigars  whose  annual  sales  ex- 
ceed one  million  and  do  not  exceed  five  million  cigars 
shall  each  pay  $150. 

Manufacturers  of  cigars  whose  annual  sales  ex- 
ceed five  million  and  do  not  exceed  twenty  million 
ciffars  shall  each  pay  $600. 

Manufacturers  of  cigars  whose  annual  sales  ex- 


42  THE  WAR  REVENUE  LAW. 

€eed  twenty  million  and  do  not  exceed  forty  million 
cigars  shall  each  pay  $1,200. 

Manufacturers  of  cigars  whose  annual  sales  ex- 
ceed forty  million  cigars  shall  each  pay  $2,496. 

Manufacturers  of  cigarettes  whose  annual  sales 
do  not  exceed  one  million  cigarettes  shall  each  pay 
$12. 

Manufacturers  of  cigarettes  whose  annual  sales 
exceed  one  million  and  do  not  exceed  two  million 
cigarettes  shall  each  pay  $24. 

Manufacturers  of  cigarettes  whose  annual  sales 
exceed  two  million  and  do  not  exceed  five  million 
cigarettes  shall  each  pay  $60. 

Manufacturers  of  cigarettes  whose  annual  sales 
exceed  five  million  and  do  not  exceed  ten  million 
cigarettes  shall  each  pay  $120. 

Manufacturers  of  cigarettes  whose  annual  sales 
exceed  ten  million  and  do  not  exceed  fifty  million 
cigarettes  shall  each  pay  $600. 

Manufacturers  of  cigarettes  whose  annual  sales 
exceed  fifty  million  and  do  not  exceed  one  hundred 
million  cigarettes  shall  each  pay  $1,200. 

Manufacturers  of  cigarettes  whose  annual  sales 
exceed  one  hundred  million  cigarettes  shall  each  pay 
$2,496. 

In  arriving  at  the  amount  of  license  tax  to  be  paid 
hereunder,  and  in  the  levy  and  collection  of  such  tax, 
each  person,  firm,  or  corporation  engaged  in  the 
manufacture  of  cigars,  cigarettes  (including  little 
cigars),  or  tobacco  shall  be  considered  and  deemed 
a  single  manufacturer. 


THE  WAR  REVENUE  LAW.  43 

And  every  person  who  carries  on  any  business  or 
occupation  for  which  special  taxes  are  imposed  by 
this  Act,  without  having  paid  the  special  tax  herein 
provided  shall,  besides  being  liable  to  the  payment 
of  such  special  tax,  be  deemed  guilty  of  a  misde- 
meanor, and  upon  conviction  thereof  shall  pay  a  fine 
of  not  more  than  $500,  or  be  imprisoned  not  more 
than  six  months,  or  both,  at  the  discretion  of  the 
€Ourt:  Provided,  That  the  special  taxes  imposed  by 
this  Act  and  payable  during  the  special  tax  year 
ending  June  thirtieth,  nineteen  hundred  and  sixteen, 
shall  be  collected  and  paid  proportionately  for  the 
period  during  which  such  taxes  shall  remain  in  force 
during  said  year. 

Tobacco  Dealers  and  Manufacturers. 

.  Though  separated  as  a  new  section,  this  really  continues  sec- 
tion 3.  In  form  this  section  is  but  slightly  modified  from  the 
Act  of  1898,  c.  448,  which  revived  the  special  tobacconist  taxes 
that  were  repealed  Oct.  1,  1890,  §  26,  out  of  R,  S.  §  3244;  but  the 
extended  classification  amounts  to  a  great  change.  The  classi- 
fication of  manufacturers  according  to  annual  sales  was  adopted 
by  the  Act  of  1898.  The  1898  special  taxes  were  repealed  by 
chapter  500  of  1902  April  12. 

A  manufacturer  of  tobacco  is  defined  by  the  Act  of  Aug.  28, 
1894,  28  Stat.  509.    It  does  not  include  cigar  making. 

A  dealer  in  leaf  tobacco  is  defined  by  R.  S.  §  3244,  as  amended 
by  the  Act  of  March  1,  1879,  20  Stat.  327,  §  14,  and  the  Act  of 
March  3,  1883,  22  Stat.  488.  And  see  the  Act  of  Aug.  5,  1909,  36 
Stat.  110. 

The  present  Act  does  not  increase,  as  did  the  Act  of  1898,  the 
tax  on  tobacco,  cigars,  cigarettes  and  snuff,  i.  e.,  on  the  products 
themselves.  The  extant  laws  are  found  in  R.  S.  §§  3355-3386a,  as 
amended.  The  increase  in  1898  was  held  constitutional.  (1902) 
Patton  V.  Brady,  184  U.  S.  608. 

The  minimum  manufacturer's  tax  in  1898  was  $12.  The  tax 
for  the  same  class  is  now  $6,  and  a  new  general  class  of  "  deal- 


44  THE  WAH  REVENUE  LAW. 

ers  in  tobacco  "  (distinct  from  "  dealers  in  leaf  ")  pays  $4.80  for 
sales  exceeding  $200  a  year.  It  is  this  flat  tax  which  must 
be  paid  by  every  ordinary  small  cigar  store.  Questions  may 
arise,  in  view  of  the  definition  here  given  of  dealer,  as  to  the 
considerable  clas?  of  persons  "  whose  business "  is  something 
else  but  who  make  substantial  incidental  sales  of  tobacco.  As 
to  what  constitutes  being  in  business,  see  §  3,  ante. 

The  Senate  amendment,  inserting  "  for  each  store,  etc.,"  merely 
makes  more  certainly  applicable  the  principle  of  R.  S.  §  3235  as 
interpreted  and  applied  to  similar  cases. 

The  new  classification  of  manufacturers  was  intended  as  "  a 
reform  in  the  direction  of  fair  play,  toward  equalizing  the  burden 
of  this  tax."  The  new  higher  classes  were  inserted  to  apply 
to  a  very  small  number  of  large  makers;  and,  large  as  the 
highest  rate  seems,  it  was  said  in  the  senate  that  the  small 
maker  would  still  pay  about  five  times  as  much  in  proportion. 
Cong.  Rec.  p.  18334. 

Revised  Statutes,  §  3244,  provides  for  the  registration  of  cigar 
makers,  but  it  is  deemed  obsolete,  as  the  provision  was  evi- 
dently left  in  the  law  by  oversight  when  other  portions  were 
repealed.  A  record  of  factories  is  kept  under  §  3389.  They 
paid  a  special  tax  before  October  1,  1890,  and  under  the  Act  of 
June  13,  1898,  repealed  April  12,  1902. 

Farmers  and  growers  of  tobacco  are  not  manufacturers.  Act 
of  Aug.  28,  1894,  28  Stat.  509,  proviso.  All  restrictions  on  them 
are  expressly  removed  by  the  Act  of  Oct.  1,  1890,  26  Stat.  618, 
as  amended  by  §  69  of  the  Act  of  Aug.  28,  1894.  A  farmer  or 
producer  is  not  a  dealer  when  he  sells  leaf  tobacco  to  manu- 
facturers, and  unstemmed  tobacco  in  natural  leaf  is  not  taxed. 
Act  of  Aug.  5,  1909,  36  Sta.  110. 

Employers  who,  as  an  accommodation,  distributed  manufac- 
tured tobacco  to  their  workmen  in  a  lumber  camp,  charging 
them  cost  prices,  were  held  taxable  dealers.  (1881)  U.  S.  Vin- 
son, 8  Fed.  Rep.  507. 

The  present  Act,  while  it  revives  the  special  taxes  on  dealers 
and  makers,  does  not,  as  did  the  Act  of  1898,  increase  the  taxes 
on  the  products,  although  an  effort  to  do  so  was  made  in  the 
Senate.  Tobacco  products  have  regularly  been  taxed  since  1862, 
the  rates  and  some  administrative  details  having  been  changed 
by  various  Acts.  The  present  rates  are  found  in  R.  S.  §  3368, 
amended  by  36  Stat.  109,  Aug.  5,  1909   (for  tobacco  and  snuff) 


THE  WAR  REVENUE  LAW.  45 

and  in  R.  S.  §  3394,  amended  by  36  Stat.  110,  same  Act  (for 
cigars  and  cigarettes). 
At  the  last  minute  the  Senate  inserted  the  word  "  transfers." 
The  clause  "  In  arriving,  etc.,"  was  an  after-thought  of  Con- 
gress. It  makes  it  unnecessary  for  a  maker  of  several  sorts 
of  tobacco  articles  to  pay  a  tax  for  each. 

PENALTY  FOR  FAILURE  TO  PAT  SPECIAL  TAX. 

The  last  paragraph  of  §  4  is  one  of  the  lost  or  dislocated  pro- 
visions of  legislation  which  are  sometimes  found  (either  by  a 
complete  reading  or  with  the  aid  of  an  index),  and  which  illus- 
trate the  haphazard  methods  of  lawmakers.  When  somebody 
discovers  that  something  has  been  "  left  out,"  it  is  arbitrarily 
"  stuck  in."  Or  if,  by  a  suggested  insertion  or  rearrangement, 
the  parts  no  longer  fit,  the  patch-work  is  permitted  to  stand 
for  want  of  time  or  inclination  to  correct  the  defect.  This  para- 
graph, as  it  is  officially  printed,  seems  to  be  but  a  part  of  the 
provisions  for  the  special  taxation  of  tobacconists;  but  it  un- 
doubtedly applies,  with  equal  force,  to  all  the  special  taxes 
enumerated  in  sections  3  and  4.  Its  prohibition  and  penalties 
are  the  same  as  in  §  4  of  the  Act  of  1898. 

By  the  Act  of  1862  a  person  who  carried  on  a  taxable  occupa- 
tion without  a  license  forfeited  three  times  the  tax  (§  59).  In 
1863  (ch.  74,  §  24)  the  penalty  for  knowingly  offending  might 
be  two  years.  In  1864  (ch.  173,  §  73)  it  was  prison  or  fine,  or 
both.  In  1867  (ch.  169)  it  was  a  fine  for  all  except  tobacco  and 
liquor  dealers  for  whom  it  might  be  two  years.  In  1870,  July 
14,  ch.  255,  the  most  of  the  special  taxes  were  repealed,  except 
liquor  and  tobacco.  The  Act  of  1898  revived  many  of  them,  as 
seen  in  the  preceding  notes. 

What  is  "carrying  on  the  business?"  (1886)  U.  S.  v.  Ren- 
necke,  28  Fed.  Rep.  847  (liquors) ;  (1909)  Cuzner  v.  Calif.  Club, 
155  Cal.  303,  20  L.  R.  A.  U.  S.  1095,  a  bona  fide  social  club  not 
business;  (1912)  Easterbrook  v.  Hebrew  Ladies'  Orph.  Soc,  85 
Conn.  289,  41  L.  R.  A.  U.  S.  615,  an  orphans'  home  not  a  business; 
(1909)  Atlantic  Postal,  etc.,  Co.  v.  Savannah,  133  Ga.  66,  city 
license  on  local  telegraph;  (1908)  Ellis  v.  State,  5  Ga.  App. 
615,  laborer  who  sells  lemonade  on  one  Sunday  does  not  violate 
the  Sabbath  law;  (1905)  Vanderbilt  Univ.  v.  Cheney,  116  Tenn. 
259,  renting  college  property  where  the  income  is  used  for  col- 
lege purposes;    (1902)   U.  S.  v.  Thomas,  115  Fed.  Rep.  207,af- 


46  THE  WAR  REVEJNUE  LAW. 

firmed  192  U.  S.  363;  (1913)  Abrast  Realty  Co.  v.  Maxwell,  20& 
Fed.  Rep.  333;  (1912)  McCoach  v.  Minehill,  etc.,  Co.,  228  U.  S. 
295,  57  L.  Ed.  842;  (1910)  Flint  v.  Stone  Tracy  Co.,  220  U.  S.. 
107,  55  L.  Ed.  389;  (1910)  Zonne  v.  Minneapolis  Synd.,  220  U. 
S.  187,  55  L.  Ed.  428;  (1914)  Wilkes-Barre,  etc.,  Co.  v.  Davis, 
214  Fed.  Rep.  511. 

ADHESIVE   STAMPS. 

Sec.  5.  That  on  and  after  the  first  day  of  Decem- 
ber, nineteen  hundred  and  fourteen,  there  shall  be 
levied,  collected,  and  paid,  for  and  in  respect  of  the 
several  bonds,  debentures,  or  certificates  of  stock  and 
of  indebtedness,  and  other  documents,  instruments, 
matters,  and  things  mentioned  and  described  in 
Schedule  A  of  this  Act,  or  for  or  in  respect  of  the 
vellum,  parchment,  or  paper  upon  which  such  in- 
struments, matters,  or  things,  or  any  of  them,  shall 
be  written  or  printed  by  any  person  or  persons,  or 
party  who  shall  make,  sign,  or  issue  the  same,  or  for 
whose  use  or  benefit  the  same  shall  be  made,  signed, 
or  issued,  the  several  taxes  or  sums  of  money  set 
down  in  figures  against  the  same,  respectively,  or 
otherwise  specified  or  set  forth  in  the  said  schedule. 
And  there  shall  also  be  levied,  collected,  and  paid, 
for  and  in  respect  to  the  preparations,  matters,  and 
things  mentioned  and  described  in  Schedule  B  of 
^  this  Act  manufactured,  sold,  or  removed  for  sale, 
the  several  taxes  or  sums  of  money  set  down  in 
words  or  figures  against  the  same,  respectively,  or 
otherwise  specified  or  set  forth  in  Schedule  B  of  this 
Act. 

Adliesiye  Stamps. 

Section   5   is  the  general   paragraph   of  imposition   in   broad 
terms.    It  is  essentially  a  re-enactment  of  §  6  of  the  Act  of 


THE  WAR  REVENUE  LAW.  47 

1898,  June  13,  which  was  amended  by  xVIarch  2,  1901,  and  re- 
pealed April  12,  1902.  Practically  the  same  clause  is  found  in 
June  30,  1864,  §  151,  and  July  1,  1862,  §  94. 

As  to  construction  and  interpretation,  see  §  23,  post. 

A  State  court's  decision  as  to  amount  of  stamps  necessary  is 
not  reviewable  by  a  federal  court.  (1866)  Campau  v.  Lewis,  3 
Wall.  106. 

As  to  what  alterations  or  new  matter  on  stamped  instruments 
necessitate  restamping,  where  substantial.  (1827)  Reed  v.  Deere,. 
7  Barn.  &  C.  261;  (1809)  Knill  v.  Williams,  10  East.  431;  (1812) 
Bathe  v.  Taylor,  15  Bast.  412. 

Minor  changes  and  corrections  not  involving  vitality.  (1801) 
Kershaw  v.  Cox,  3  Esp.  N.  P.  C.  246  (insertion  of  "  to  order  "  ia 
a  bill  of  exchange),  case  often  followed;  (1828)  Steele  v.  Spen- 
cer, 1  Peters,  552. 

Burden  of  proof  is  on  claimant  under  the  instrument.  (1847) 
Waring  v.  Smyth.  2  Barb.  Ch.  119;  (1839)  Herrick  v.  Malin,  22 
Wend.  388. 

As  to  when  a  letter  is  equivalent  to  a  formal  instrument. 
(1866)  Crocker  v.  Foley,  13  Allen,  376;  (1868)  Boyd  v.  Hood,  57 
Pa.  98;  (1818)  Orford  v.  Cole,  2  Starkie,  351  (a  promise  of  mar- 
riage, value  not  measurable).  Cf.  (1870)  Mercer  v.  Mercer,  29 
Iowa,  557   (conveyance  solely  for  love  and  affection). 

A  joint  and  several  agreement  requires  only  one  stamp.  (1867) 
Ballard  v.  Burnside,  49  Barb.  102.  See  (1811)  Davis  v.  Williams,. 
13  East.  232. 

A  contract  embodied  in  two  papers  requires  one  stamp.  (1871) 
Bowker  v.  Goodwin,  7  Nev.  135. 

An  unstamped  instrument  may  be  the  subject  of  forgery. 
(1899)  Thomas  v.  Texas,  40  Tex.  Crim.  App.  562,  46  L.  R.  A.  454 
(order  to  pay,  under  Act  of  1898). 

Where  the  apparent  date  of  an  instrument  is  not  the  actual 
time  of  making,  the  latter  determines  whether  it  must  be  stamped. 
(1866)  Willey  v.  Robinson,  13  Allen,  128. 

The  Act  of  1862  was  held  not  to  be  retroactive  in  requiring- 
stamps  on  papers.  (1867)  Bayly  v.  McKnight,  19  La.  Ann.  321. 
Cf.  (1866)  McLearn  v.  Skelton,  18  La.  Ann.  514. 

As  to  penalties  for  omission,  etc.,  see  the  following  sections: 
and  as  to  the  various  instruments  affected,  see  the  respective 
separate  subdivisions  under  Schedule  A,  post. 

Generally  speaking,  courts  will  not  take  notice  of  the  revenue 


48  THE  WAR  REVENUE  LAW. 

laws  of  other  countries.  (1775)  Holman  v.  Johnson,  1  Cowper, 
341;  (1823)  James  v.  Catherwood,  3  Dowling  &  R.  190;  (1806) 
Ludlow  V.  VanRensselaer,  1  J.  R.  N.  Y.  96;  Tllsley  on  Stamp 
Laws,  301;   Collins  on  Stamp  Laws,  440. 

Under  the  stamp  tax  Act  of  1864,  in  a  litigation  as  to  whether 
a  memorandum  check  was  taxable,  the  court  gave  the  follow- 
ing "few  simple  rules:" 

1.  Instruments  described  in  technical  language,  or  in  terms 
especially  descriptive  of  their  own  character,  are  classed  un- 
der that  head,  and  are  not  to  be  included  in  the  general  words 
of  the  statute. 

2.  The  words  of  the  statute  are  to  be  taken  in  the  sense  in 
which  they  will  be  understood  by  that  public  in  which  they  are 
to  take  effect.  Science  and  skill  are  not  required  in  their  in- 
terpretation, except  where  scientific  or  technical  terms  are  used. 

3.  The  liability  of  an  instrument  to  a  stamp  duty,  as  well  as 
the  amount  of  such  duty,  is  determined  by  the  form  and  face 
of  the  instrument,  and  cannot  be  affected  by  proof  of  facts  out- 
side of  the  instrument  itself. 

4.  If  there  is  a  doubt  as  to  the  liability  of  an  instrument  to 
taxation,  the  construction  is  in  favor  of  the  exemption,  because. 
In  the  language  of  Pollock,  C.  B.,  in  Gurr  v.  Scudds,  "  a  tax  can- 
not be  imposed  without  clear  and  express  words  for  that  pur- 
pose."    (1873)  U.  S.  V.  Isham,  17  Wall.  496,  503. 

Absence  of  proper  stamp  from  tobacco  package  is  prima  facie 
evidence  of  non-payment  of  tax,  and  forfeiture  follows:  §  3373, 
R.  S.  (1882)  U.  S.  V.  Keyes,  10  Fed.  Rep.  876  (even  refuse  or 
worthless  scraps  and  sweepings.  So  absence  from  cigars,  R. 
S.  §  3398;  from  fermented  liquors,  R.  S.  §  3352;  from  spirits, 
R.  S.  §  3289;   (1893)  U.  S.  v.  Sykes,  58  Fed.  Rep.  1000,  1004. 

The  face  and  form  of  a  paper,  rather  than  the  nature  of  the 
transaction,  will  determine  taxability  under  stamp  laws.  (1899) 
Granby  Mercantile  Co.  v.  Webster,  98  Fed.  Rep.  604;  (1902) 
Mchts'  Warehouse  Co.  v.  McClain,  112  Fed.  Rep.  787. 

The  unexpected  prolongation  of  the  debates  on  the  measure 
required  the  operation  of  this  section  to  be  put  forward  from 
November  1st,  as  planned,  to  December  1st.  Any  shorter  grace 
would  have  reproduced  the  Civil  War  troubles,  when  enabling 
Acts  had  to  be  passed  because  stamps  were  not  obtainable. 


THE  WAR  REVENUE  LAW.  49 

PENALTY  FOR  OMISSION  TO  STAMP. 

Sec.  6.  That  if  any  person  or  persons  shall  make, 
sign,  or  issue,  or  cause  to  be  made,  signed,  or  issued, 
any  instrument,  document,  or  paper  of  any  kind  or 
description  whatsoever,  without  the  same  being  duly 
stamped  for  denoting  the  tax  hereby  imposed  there- 
on, or  without  having  thereupon  an  adhesive  stamp 
to  denote  said  tax,  such  person  or  persons  shall  be 
deemed  guilty  of  a  misdemeanor,  and  upon  convic- 
tion thereof  shall  pay  a  fine  of  not  more  than  $100, 
at  the  discretion  of  the  court. 

Penalty  for  Omission  of  Stamp. 

These  sections  require  the  stamp  to  be  affixed,  but  at  no  place 
(unless  by  indirect  implication  as  in  the  proviso  of  §  12)  is  any 
particular  person  required  to  affix  it.  It  was  held  immaterial. 
(1868)  Adams  v.  Dale,  29  Ind.  273.  Cf.  (1867)  Myers  v.  Smith, 
48  Barb.  614;  (1865)  Teagarden  v.  Garver,  24  Ind.  399.  As  to 
cancellation,  see  §  8. 

Section  6,  though  clearly  taken  over  from  the  Act  of  June  13, 
1898  (and  in  turn  from  July  1,  1862,  R.  S.  §  3422),  was  radically 
changed  by  the  striking  of  the  former  provision  making  such 
unstamped  Instruments  incompetent  as  evidence.  Earlier  Acts 
imposed  forfeitures  and  penalties  in  addition  to  inadmissibility. 
The  Act  of  1898  substituted  the  misdemeanor  penalty  with  in- 
admissibility (both  in  the  corresponding  §  7  and  in  two  others 
§•§  13  and  14  which  also,  as  §§  11  and  12,  post,  have  been  changed 
in  this  respect). 

See  notes  under  §§  11, 12,  post,  for  the  reported  litigation  on  the 
effect  on  the  instrument,  the  extent  and  nature  of  which  doubt- 
less induced  the  present  amendment  of  §  6  and  also  of  the  old 
§  13  (now  §  11),  §  14  (now  §  12).  Congress  may  have  been  in- 
fluenced also  by  the  undesirability  of  possibly  totally  invalidating 
a  large  number  of  instruments  by  so  stringent  a  provision  in  an 
Act  intended  to  be  in  operation  only  about  one  year.    The  pos- 


50  THE  WAR  REVENUE  LAW. 

slble  inconvenience  would  outweigh  the  small  saving  of  taxes 
which  alone  would  be  the  motive  for  such  severity. 

The  Act  now  has  the  misdemeanor  penalty,  in  this  connection, 
as  follows: 

Section  6,  covering  all  papers;  no  question  of  intent;  fine  up 
to  $100  for  omission. 

Section  8,  covering  all  papers;  fine  up  to  $500,  or  prison  to 
six  months,  or  both,  for  fraudulent  use  of  uncancelled  stamp. 

Section  9,  covering  promissory  notes;  fine  up  to  $200  for 
omission  with  intent  to  evade. 

Section  11,  covering  all  papers;  fine  up  to  $50,  or  prison  to  six 
months,  or  both,  for  registering,  issuing,  selling  or  transferring 
without  due  stamping  and  cancellation,  with  intent  to  evade. 

The  little  words  "  with  intent,  etc.,"  are  clearly  important,  and 
for  better  reasons  than  a  senator  gave  for  moving  an  amend- 
ment to  include  them.  "  I  see  those  words  are  to  be  found  in 
some  of  the  old  acts  in  regard  to  stamps  in  1864,  1865,  1866, 
and  along  there."     Cong.  Rec.  May  17,  1898,  p.  5587. 

FORGING   AND    COUNTERFEITING   STAMPS. 

Sec.  7.  That  if  any  person  shall  forge  or  counter- 
feit, or  cause  or  procure  to  be  forged  or  counter- 
feited, any  stamp,  die,  plate,  or  other  instrument, 
or  any  part  of  any  stamp,  die,  plate,  or  other  instru- 
ment, which  shall  have  been  provided,  or  may  here- 
after be  provided,  made,  or  used  in  pursuance  of 
this  Act,  or  shall  forge,  counterfeit,  or  resemble,  or 
cause  or  procure  to  be  forged,  counterfeited,  or  re- 
sembled, the  impression,  or  any  part  of  the  impres- 
sion, of  any  such  stamp,  die,  plate  or  other  instru- 
ment, as  aforesaid,  upon  any  vellum,  parchment,  or 
paper,  or  shall  stamp  or  mark,  or  cause  or  procure  to 
be  stamped  or  marked,  any  vellum,  parchment,  or 
paper  with  any  such  forged  or  counterfeited  stamp, 
die,  plate,  or  other  instrument,  or  part  of  any  stamp. 


THE  WAR  REVENUE  LAW.  51 

die,  plate,  or  other  instrument,  as  aforesaid,  with 
intent  to  defraud  the  United  States  of  any  of  the 
taxes  hereby  imposed,  or  any  part  thereof;  or  if  any 
person  shall  utter,  or  sell,  or  expose  for  sale,  any 
vellum,  parchment,  paper,  article,  or  thing  having 
thereupon  the  impression  of  any  such  counterfeited 
stamp,  die,  plate,  or  other  instrument,  or  any  part 
of  any  stamp,  die,  plate,  or  other  instrument,  or  any 
such  forged,  counterfeited,  or  resembled  impression, 
or  part  of  impression,  as  aforesaid,  knowing  the 
same  to  be  forged,  counterfeited,  or  resembled;  or 
if  any  person  shall  knowingly  use  or  permit  the  use 
of  any  stamp,  die,  plate,  or  other  instrument,  which 
shall  have  been  so  provided,  made,  or  used  as  afore- 
said, with  intent  to  defraud  the  United  States ;  or  if 
any  person  shall  fraudulently  cut,  tear,  or  remove, 
or  cause  or  procure  to  be  cut,  torn,  or  removed,  the 
impression  of  any  stamp,  die,  plate,  or  other  instru- 
ment which  shall  have  been  provided,  made,  or 
used  in  pursuance  of  this  Act  from  any  vellum, 
parchment,  or  paper,  or  any  instrument  or  writing 
charged  or  chargeable  with  any  of  the  taxes  im- 
posed by  law;  or  if  any  person  shall  fraudulently 
use,  join,  fix,  or  place,  or  cause  to  be  used,  joined, 
fixed,  or  placed,  to,  with,  or  upon  any  vellum,  parch- 
ment, paper,  or  any  instrument  or  writing  charged 
or  chargeable  with  any  of  the  taxes  hereby  imposed, 
any  adhesive  stamp,  or  the  impression  of  any  stamp, 
die,  plate,  or  other  instrument,  which  shall  have 
been  provided,  made,  or  used  in  pursuance  of  law, 
and  which  shall  have  been  cut,  torn,  or  removed 


52  THE  WAR  REVEINUE  LAW. 

from  any  other  vellum,  parchment,  or  paper,  or  any 
instrument  or  writing  charged  or  chargeable  with 
any  of  the  taxes  imposed  by  law;  or  if  any  person 
shall  willfully  remove  or  cause  to  be  removed,  alter 
or  cause  to  be  altered,  the  canceling  or  defacing 
marks  of  any  adhesive  stamp  with  intent  to  use 
the  same,  or  to  cause  the  use  of  the  same,  after  it 
shall  have  been  once  used,  or  shall  knowingly  or 
willfully  sell  or  buy  such  washed  or  restored  stamp, 
or  offer  the  same  for  sale,  or  give  or  expose  the 
same  to  any  person  for  use,  or  knowingly  use  the 
same,  or  prepare  the  same  with  intent  for  the  fur- 
ther use  thereof;  or  if  any  person  shall  knowingly 
and  without  lawful  excuse  (the  proof  whereof  shall 
lie  on  the  person  accused)  have  in  his  possession 
any  washed,  restored,  or  altered  stamp  which  has 
been  removed  from  any  vellum,  parchment,  paper, 
instrument,  or  writing,  then,  and  in  every  such  case, 
every  person  so  offending,  and  every  person  know- 
ingly and  willfully  aiding,  abetting,  or  assisting  in 
committing  any  such  offenses  as  aforesaid  shall  be 
seemed  guilty  of  a  misdemeanor,  and,  upon  convic- 
tion thereof,  shall  forfeit  the  said  counterfeit  stamps 
and  the  articles  upon  which  they  are  placed,  and 
shall  be  punished  by  fine  not  exceeding  $1,000,  or 
by  imprisonment  and  confinement  at  hard  labor  not 
exceeding  five  years,  or  both,  at  the  discretion  of 
the  court. 

Forging  and  Counterfeiting  Stamps. 

Compare  Act  of  1898,  June  13.  §  8;   1869.  April  10,  §  2;   1866, 
July  13,  §  9;  1864,  June  30,  §  155;   1862,  July  1,  §  98,  and  R.  S. 


THE  WAR  REVENUE  LAW.  53 

§  3429,  as  amended  by  20  Stat.  327,  Act  of  March  1,  1879.    And 
see  Crim.  Code,  §§  147,  148,  including  stamps. 

See  notes  under  §  23,  post.  (1902)  Kaufman  v.  U.  S.,  113  Fed. 
Rep.  919  (selling  washed  stamps) ;  (1902)  U.  S.  v.  Brown,  119 
Fed.  Rep.  482   (same  and  impersonation  of  revenue  officer). 


CANCELLATION. 

Sec.  8.  That  in  any  and  all  cases  where  an  ad- 
hesive stamp  shall  be  used  for  denoting  any  tax  im- 
posed by  this  Act,  except  as  hereinafter  provided, 
the  person  using  or  affixing  the  same  shall  write  or 
stamp  thereupon  the  initials  of  his  name  and  the 
date  upon  which  the  same  shall  be  attached  or  usedy 
so  that  the  same  may  not  again  be  used.  And  if  any 
person  shall  fraudulently  make  use  of  an  adhesive 
stamp  to  denote  any  tax  imposed  by  this  Act  with- 
out so  effectually  canceling  and  obliterating  such 
stamp,  except  as  before  mentioned,  he,  she,  or  they 
shall  be  deemed  guilty  of  a  misdemeanor,  and  upon 
conviction  thereof  shall  pay  a  fine  of  not  exceeding 
$500,  or  be  imprisoned  not  more  than  six  months,  or 
both,  at  the  discretion  of  the  court:  Provided,  That 
instead  of  cancellation  by  initials  and  date,  the 
stamps  on  the  articles  enumerated  in  Schedule  B 
shall  be  so  affixed  on  the  box,  bottle,  or  package  that 
in  opening  the  same,  or  using  the  contents  thereof, 
the  said  stamp  shall  be  effectually  destroyed;  and  in 
default  thereof  the  party  making  default  shall  be 
liable  to  the  same  penalty  imposed  for  neglect  to 
affix  said  stamp  as  hereinbefore  prescribed  in  this 
Act. 


54  THE  WAR  REVENUE  LAW. 

CanceliauoD. 

See  Act  of  1898,  June  13,  §  9;  1864,  June  3,  §  156;  1862,  July 
1,  §  99.  The  methods  of  cancelling  the  various  other  internal 
revenue  stamps  are  provided  in  the  respective  appropriate  R.  S. 
sections. 

While  it  Is  a  matter  of  indifference  who  attaches  a  stamp,  yet 
If  the  law  is  to  be  effective  the  person  attaching  it  or  issuing  the 
paper  must  be  held  to  do  the  cancelling.  In  numerous  instances 
it  Is  more  convenient  and  doubtless  safe  for  the  latter  person 
to  authorize  the  first  recipient  of  the  paper  to  cancel  the  stamp. 
For  instance,  it  has  been  customary  for  telegraph  and  other  com- 
panies and  certain  institutions  to  assume  that  the  handing  in  of 
samped  papers  gave  authority  to  cancel  the  stamps.  The  pen- 
alty is  for  fraud.  (1867)  Myers  v.  Smith,  48  Barb.  614;  (1868) 
Cedar  Rapids  R.  R.  Co.  v.  Stewart,  25  Iowa,  115. 

Cancellation  should  be  such  as  to  prevent  re-use  and  a  de- 
facement was  held  enough.  (1870)  Taylor  v.  Duncan,  33  Tex. 
440.  The  sufficiency  of  the  cancellation  is  a  question  of  fact. 
(1870)  Rees  v.  Jackson,  64  Pa.  486;  (1869)  U.  S.  v.  Brown, 
Deady,  566.  Cf.  (1873)  Foster  v.  Holley's  Admin.,  49  Ala.  593, 
where  the  court  declined  to  believe  that  Congress  intended  to 
take  away  the  right  of  contract  from  a  person  who  happened 
to  be  uneducated  or  otherwise  Incapable  of  following  the  Act 
precisely. 

Failure  to  cancel  would  not  invalidate  a  stamped  note.  (1867) 
Ballard  v.  Burnside,  49  Barb.  102;  (1870)  Union,  etc.,  Ass'n  v. 
JSTeill,  31  Iowa  95;  (1881)  Dowell  v.  Applegate,  7  Fed.  Rep.  881; 
<1865)  Desmond  v.  Norris,  10  Allen,  250. 

Even  under  the  stricter  earlier  laws,  a  failure  to  cancel  did 
not  exclude  from  evidence.  (1872)  Browne  v.  Bennett,  24  La. 
Ann.  618;  (1872)  Doffin  v.  Guyer,  39  Ind.  215;  (1870)  Patterson 
V.  Glle,  1  Col.  T.  200;    (1868)  Adams  v.  Dale,  29  Ind.  273. 

Under  §  22,  post,  the  commissioner  has  power  to  prescribe 
methods  of  cancellation,  either  substituted  or  additional.  Under 
this  power  in  former  Acts,  stamps  were  imprinted,  as  on  checks, 
so  that  the  ordinary  writing  would  cancel.  This  is  analogous 
to  the  placing  of  adhesive  stamps  on  packages  so  that  the  open- 
ing of  the  package  destroys  the  stamp.  The  department  will 
send  its  latest  circular  on  this  subject  to  anyone  who  requests  it. 


THE  WAR  REVENUE  LAW.  55 

OMITTING  STAMP  FROM  PROMISSORY  NOTE. 

Sec.  9.  That  if  any  person  or  persons  shall  make, 
sign,  or  issue,  or  cause  to  be  made,  signed,  or  issued, 
or  shall  accept  or  pay,  or  cause  to  be  accepted  or 
paid,  with  design  to  evade  the  payment  of  any  stamp 
tax,  any  promissory  note  liable  to  any  of  the  taxes 
imposed  by  this  Act,  without  the  same  being  duly 
stamped,  or  having  thereupon  an  adhesive  stamp 
for  denoting  the  tax  hereby  charged  thereon,  he, 
she,  or  they  shall  be  deemed  guilty  of  a  misde- 
meanor, and  upon  conviction  thereof  shall  be  pun- 
ished by  a  fine  not  exceeding  $200,  at  the  discretion 
of  the  court. 


OmittiDig  Stamp  from  Promissory  Note. 

Compare  Act  of  1898,  June  13,  ch.  448,  §  10;  R.  S.  1878,  §  3422; 
1866,  July  13,  ch.  184;  1864,  June  30,  ch.  173,  §  158;  1862,  July 
1,  §  100. 

The  older  laws  imposed  a  forfeiture  penalty  and  made  the  in- 
strument invalid.  They  included  all  negotiable  instruments. 
Later,  the  invalidation  was  dropped  and  the  omission  with  de- 
sign became  a  misdemeanor.     Cf.  §  6  and  notes. 

Section  9  now  applies  only  to  notes,  and  many  of  the  old  cases 
on  stamping  notes  are  inapplicable  because  of  the  statutory 
changes  above  mentioned. 

The  Act  of  1898  even  covered  foreign  bills  of  exchange  by  a 
special  section  (§  11),  inserted  at  this  point,  with  penalty  up  to 
$100.     Repealed  April  12,  1902. 

An  unintentional  omission  of  a  stamp  from  a  note  might  be 
corrected  by  an  authorized  attorney  holding  it,  there  being  no 
intent  to  evade.  (1870)  Vaughan  v.  O'Brien,  39  How.  Pr.  515; 
(1867)  Blunt  v.  Bates,  40  Ala.  470. 

A  subsequent  holder  in  good  faith  for  value  is  not  affected  by 
an  original  failure  to  stamp  a  note.  (1871)  Sperry  v.  Horr,  32 
Iowa,  184. 


56  THE  WAR  REVENUE  LAW. 

An  omitted  stamp  might  be  aflBxed  in  open  court.  (1865)  Gar- 
land V.  Lane,  46  N.  H.  245;  (1872)  Waterbury  v.  McMillan,  46 
Miss.  635. 

So  also  in  England,  where  decrees  in  chancery  have  been  kept 
back  to  afford  time.  (1822)  Chervet  v.  Jones,  6  Mad.  267;  (1834) 
Owen  V.  Thomas,  3  Mylne  &  Keen,  353;  (1834)  Beckwith  v.  Ban- 
ner, 6  Carrington  &  P.  681. 

Even  under  strict  statute,  an  unstamped  note  might  be  used 
collaterally,  as  to  show  by  its  very  appearance  that  a  drunken 
man  must  have  written  it,  the  defense  being  fraud.  (1814)  Greg- 
ory V.  Eraser,  3  Camp.  454;  (1838)  Coppock  v.  Bower,  4  M.  & 
W.  36.  But  see,  under  a  later  rule  (1891)  Ashling  v.  Boon,  I 
Ch.  568. 

Unstamped  checks  might  be  offered  in  evidence  collaterally, 
where  the  object  was  not  to  make  out  a  case  or  a  defense. 
(1903)   Bryan  v.  First  Nat.  Bk.,  205  Pa.  St.  7. 

A  stamp  omitted  ignorantly  might  be  affixed  later  when  the 
necessity  was  discovered.  (1866)  Tobey  v.  Chipman,  13  Allen, 
123;  (1867)  Tripp  v.  Bishop,  56  Pa.  424;  (1868)  Green  v.  Lowry, 
38  Ga.  548. 

As  to  the  maker's  inability  to  supply  a  stamp  after  the  death 
of  the  payee,  see  (1868)  Weyman  v.  Torreyson,  4  Nev.  124.  But 
see  (a  case  of  a  deed)    (1870)  Mercer  v.  Mercer,  29  Iowa,  557. 

The  stamp  was  no  part  of  the  note  to  which  it  was  obliged  to 
be  affixed,  and  need  not  appear  on  an  appeal  record.  (1871) 
Cabbott  V.  Radford,  17  Minn.  320;  (1871)  Prather  v.  Tulauf,  38 
Ind.  155;  (1867)  Hallock  v.  Jaudin,  34  Cal.  167;  (1866)  Trull 
V.  Moulton,  12  Allen,  396. 

DISTRIBUTION  OF  STAMPS. 

Sec.  10.  That  the  collectors  of  the  several  districts 
are  hereby  authorized  and  required  to  furnish  to 
any  assistant  treasurer  of  the  United  States  or  desig- 
nated depositary  thereof,  or  any  postmaster  located 
in  their  collection  districts,  respectively,  a  suitable 
quantity  of  adhesive  stamps,  without  prepayment 
therefor,  and  may  in  advance  require  of  any  desig- 


THE  WAR  REVENUE  LAW.  57 

nated  depositary,  assistant  treasurer  of  the  United 
States,  or  postmaster  a  bond,  with  suflficient  sureties, 
to  an  amount  equal  to  the  value  of  the  adhesive 
stamps  which  may  be  placed  in  his  hands  and  remain 
unaccounted  for,  conditioned  for  the  faithful  return, 
whenever  so  required,  of  all  quantities  or  amounts 
undisposed  of,  and  for  the  payment  monthly  of  all 
quantities  or  amounts  sold  or  not  remaining  on  hand. 
And  it  shall  be  the  duty  of  such  collectors  to  supply 
their  deputies  with,  or  sell  to  other  parties  within 
their  respective  districts  who  may  make  application 
therefor,  adhesive  stamps,  upon  the  same  terms  al- 
lowed by  law  or  under  the  regulations  of  the  Com- 
missioner of  Internal  Revenue,  who  is  hereby  au- 
thorized to  make  such  other  regulations,  not  incon- 
sistent herewith,  for  the  security  of  the  United 
States  and  the  better  accommodation  of  the  public, 
in  relation  to  the  matters  hereinbefore  mentioned, 
as  he  may  judge  necessary  and  expedient.  And  the 
Secretary  of  the  Treasury  may  from  time  to  time 
make  such  regulations  as  he  may  find  necessary  to 
insure  the  safe-keeping  or  prevent  the  illegal  use  of 
all  such  adhesive  stamps. 

Distribntion  of  Stamps. 

Cf.  Act  of  June  13.  1898,  ch.  448,  §  12,  repealed  by  April  12, 
1902,  §  7;  Act  of  June  30,  1864,  §  170;  July  1,  1862,  §  102. 

These  are  administrative  provisions  which  do  not  concern  the 
tax  payer  except  so  far  as  the  department  has  power  to  provide 
for  sales  of  stamps  without  prepayment  on  bonded  security  un- 
der regulations  to  be  adopted.  See  (1880)  U.  S.  v.  Goldback, 
102  U.  S.  623.    As  to  stamp  collector,  see  T.  D.  93,  April  10,  1900. 


58  THE  WAR  RE3VBNUE  LAW. 

PENALTY  FOR  ISSUING,  ETC.,  WITHOUT 
STAMP;  POST-STAMPING. 

Sec.  11.  That  any  person  or  persons  who  shall 
register,  issue,  sell,  or  transfer,  or  who  shall  cause 
to  be  issued,  registered,  sold,  or  transferred,  any 
instrument,  document,  or  paper  of  any  kind  or  de- 
scription whatsoever  mentioned  in  Schedule  A  of 
this  Act,  without  the  same  being  duly  stamped,  or 
having  thereupon  an  adhesive  stamp  for  denoting 
the  tax  chargeable  thereon,  and  canceled  in  the  man- 
ner required  by  law,  with  intent  to  evade  the  pro- 
visions of  this  Act,  shall  be  deemed  guilty  of  a 
misdemeanor,  and  upon  conviction  thereof  shall  be 
punished  by  a  fine  not  exceeding  $50,  or  by  impris- 
onment not  exceeding  six  months,  or  both,  in  the 
discretion  of  the  court:  Provided,  That  hereafter,  in 
all  cases  where  the  party  has  not  affixed  to  any  in- 
strument the  stamp  required  by  law  thereon  at  the 
time  of  issuing,  selling,  or  transferring  the  said 
bonds,  debentures,  or  certificates  of  stock  or  of  in- 
debtedness, and  he  or  they,  or  any  party  having  an 
interest  therein,  shall  be  subsequently  desirous  of 
affixing  such  stamp  to  said  instrument,  or,  if  said 
instrument  be  lost,  to  a  copy  thereof,  he  or  or  they 
shall  appear  before  the  collector  of  internal  revenue 
of  the  proper  district,  who  shall,  upon  the  payment 
of  the  price  of  the  proper  stamp  required  by  law, 
and  of  a  penalty  of  $10,  and,  where  the  whole  amount 
of  the  tax  denoted  by  the  stamp  required  shall  ex- 
ceed the  sum  of  $50,  on  payment  also  of  interest, 
.:at  the  rate  of  six  per  centum,  on  said  tax  from  the 


THE  WAR  REVENUE  LAW.  59 

day  on  which  such  stamp  ought  to  have  been  afl&xed, 
affix  the  proper  stamp  to  such  bond,  debenture,  cer- 
ticate  of  stock  or  of  indebtedness  or  copy,  and  note 
upon  the  margin  thereof  the  date  of  his  so  doing, 
and  the  fact  that  such  penalty  has  been  paid;  and 
the  same  shall  thereupon  be  deemed  and  held  to  be 
as  valid,  to  all  intents  and  purposes,  as  if  stamped 
when  made  or  issued:  And  provided  further,  That 
where  it  shall  appear  to  said  collector,  upon  oath  or 
otherwise,  to  his  satisfaction,  that  any  such  instru- 
ment has  not  been  duly  stamped,  at  the  time  of 
making  or  issuing  the  same,  by  reason  of  accident, 
mistake,  inadvertence,  or  urgent  necessity,  and 
without  any  willful  design  to  defraud  the  United 
States  of  the  stamp,  or  to  evade  or  delay  the  pay- 
ment thereof,  then  and  in  such  case,  if  such  instru- 
ment, or,  if  the  original  be  lost,  a  copy  thereof,  duly 
certified  by  the  officer  having  charge  of  any  records 
in  which  such  original  is  required  to  be  recorded, 
or  otherwise  duly  proven  to  the  satisfaction  of  the 
collector,  shall,  within  twelve  calendar  months  after 
the  making  or  issuing  thereof,  be  brought  to  the 
said  collector  of  internal  revenue  to  be  stamped, 
and  the  stamp  tax  chargeable  thereon  shall  be  paid, 
it  shall  be  lawful  for  the  said  collector  to  remit  the 
penalty  aforesaid  and  to  cause  such  instrument  to 
l)e  duly  stamped.  And  when  the  original  instru- 
ment, or  a  certified  or  duly  proven  copy  thereof,  as 
aforesaid,  duly  stamped  so  as  to  entitle  the  same 
to  be  recorded,  shall  be  presented  to  the  clerk,  reg- 
ister, recorder,  or  other  officer  having  charge  of  the 


60  THE  WAR  REVENUE  LAW. 

original  record,  it  shall  be  lawful  for  such  oflScer, 
upon  the  payment  of  the  fee  legally  chargeable  for 
the  recording  thereof,  to  make  a  new  record  thereof, 
or  to  note  upon  the  original  record  the  fact  that  the 
error  or  omission  in  the  stamping  of  said  original 
instrument  has  been  corrected  pursuant  to  law;  and 
the  original  instrument  or  such  certified  copy,  or 
the  record  thereof,  may  be  used  in  all  courts  and 
places  in  the  same  manner  and  with  like  effect  as 
if  the  instrument  had  been  originally  stamped: 
And  provided  further,  That  in  all  cases  where  the 
party  has  not  affixed  the  stamp  required  by  law 
upon  any  such  instrument  issued,  registered,  sold, 
or  transferred  at  a  time  when  and  at  a  place  where 
no  collection  district  was  established,  it  shall  be 
lawful  for  him  or  them,  or  any  party  having  an  in- 
terest therein,  to  affix  the  proper  stamp  thereto, 
or,  if  the  original  be  lost,  to  a  copy  thereof.  But  no 
right  acquired  in  good  faith  before  the  stamping  of 
such  instrument,  or  copy  thereof,  as  herein  provided, 
if  such  record  be  required  by  law,  shall  in  any  man- 
ner be  affected  by  such  stamping  as  aforesaid. 

Penalty  for  Issnini?,  Begisterini?,  Selling  or  Transferring  With- 
out Stamps;  Proiision  for  Post-stamping.  (See  notes  under 
§  6,  ante,  and  §§  12  and  13,  post.) 

Cf.  Act  of  July  13,  1866,  ch.  184,  §  9,  and  June  13,  1898,  ch. 
448,  §  13,  amended  by  March  2,  1901,  ch.  806,  §  7. 

As  this  section  was  enacted  in  1898,  it  was  a  piece  of  careless 
law  making,  but  the  serious  defect  was  cured  by  the  amend- 
ment of  1901.  (1911)  U.  S.  V.  Chamberlin,  219  U.  S.  250,  55  L. 
Ed.  204. 

The   section,   as   now    re-enacted,   has   again   been   materially 


THE  WAR  REVENUE  LAW.  61 

^altered,  and,  like  the  adjacent  sections,  has  lost  a  principal 
sting.  But  again  haste  and  heedlessness  are  evident.  Default 
of  proper  stamps  and  cancellation  no  longer  invalidates  the  in- 
strument, but  all  the  old  provisions  for  validating  defective  pa- 
pers are  carried  over  into  the  new  law.  They  will  have  their 
chief  uses  in  correcting  such  stamp  omissions  as  would  prevent 
instruments  from  being  registered  or  recorded  under  federal 
laws;  and  in  avoiding  the  penalty  which  §  6  broadly  imposes 
without  regard  to  intent.  The  severer  penalties  of  §§  8,  9  and  11 
are  upon  intentional  or  fraudulent  omissions. 

The  first  proviso  in  §  11,  retaining  the  old  language,  says  that 
due  post-stamping  shall  restore  validity  for  all  purposes.  And 
the  second  proviso  even  says  the  corrected  instrument  "  may  be 
used  in  all  courts,  etc."  Such  a  procedure  is  no  longer  neces- 
sary in  order  to  enable  a  paper  to  be  used  in  evidence. 

As  the  law  now  stands  (Act  of  1914),  it  has  lost  from: 

Section  6  the  exclusion  from  evidence. 

Section  11  the  invalidity  and  non-effect. 

Section  12  the  exclusion  from  evidence. 

Section  13  the  exclusion  from  evidence. 

Whatever  discussion  there  was  on  the  law  and  decisions  was 
in  committee,  but  the  chairman  merely  flatly  stated  on  the 
floor  that  the  federal  government  had  no  right  to  make  rules 
of  evidence.  This  is  in  fine  contrast  to  the  action  of  the  House 
in  1898  (before  which  time  the  courts  had  repeatedly  refused  to 
recognize  such  a  power  in  Congress),  when  an  amendment  tried 
to  strengthen  "  invalid  and  of  no  effect "  by  adding  "  utterly 
void"  (which  were  in  some  of  the  earlier  Acts). 

That  an  instrument  was  "  void  and  of  no  effect,"  was  held  not 
to  mean  that  a  contract  was  "  invalid."  (1868)  McAfferty  v.  Hale, 
24  Iowa,  355. 

The  person  to  appear  before  the  collector  is  the  one  who 
should  have  affixed  the  stamp.  (1868)  Myers  v.  Smith,  48  Barb. 
614;  but  see  (1869)  Schermerhorn  v.  Burgess,  55  Barb.  422. 

The  collector  shall  affix  the  stamp  or  cause  the  paper  to  be 
stamped.  See  (1871)  Mobile  R.  Co.  v.  Edwards,  46  Ala.  267; 
(1871)  Corrie  v.  Billin,  23  La.  Ann.  250.  Under  the  Act  of  1864, 
an  omitted  stamp  might  be  affixed  in  open  court.  (1869)  Wig- 
ham  V.  Pickett,  43  Ala.  140.  Cf.  (1872)  Moore  v.  Moore,  47  N.  Y. 
467,  and  cases  under  §  9,  ante. 


62  THE  WAR  REVENUE  LAW. 

In  the  case  of  an  unstamped  assignment  of  mortgage,  the  col- 
lector later  remitted  the  penalty  and  stamped  the  instrument. 
Held,  under  the  Act  of  1898,  that  the  unstamped  instrument  was 
not  void,  but  at  most  excluded  from  evidence;  and  that  the 
correction  of  the  defect  according  to  the  Act  restored  all  its 
qualities  and  relates  back  to  the  time  of  issue.  (1900)  Wingert 
V.  Zeigler,  91  Md.  318. 

Formerly,  the  record  of  a  mortgage  which  was  not  properly 
stamped  was  inadmissible  against  third  parties.  Even  a  subse- 
quent stamping  by  the  collector  could  not  divert  intervening  in-" 
terests.     (1867)  McBride  v.  Doty,  23  Iowa,  122. 

Where  a  certified  copy  of  a  mortgage  was  offered  in  evidence, 
it  was  presumed  that  the  recorder  required  a  proper  stamping 
on  the  original.     (1872)  Grand  v.  Cox,  24  La.  Ann.  462. 

Invalidity  under  the  Act  of  1866  resulted  only  from  fraudulent 
omission.  (1869)  Green  v.  Holway,  101  Mass.  243;  (1870)  Camp- 
bell V.  Wilcox,  10  Wall.  421.  Followed  as  to  the  Act  of  1898  by 
(1903)  Rowe  v.  Bowman,  183  Mass.  488. 

The  original  obligation  might  be  enforced,  even  where  an  un- 
stamped writing  was  not  admitted  to  proof.  (1795)  Wilson  v. 
Kennedy,  1  Esp.  245;  (1808)  Brown  v.  Watts,  1  Taunt.  353;  (1868) 
Wilson  V.  Carey,  40  Vt.  179;  (1866)  Jacquin  v.  Warren,  40  IlL 
459;   (1868)  Weyman  v.  Torreyson,  4  Nev.  124. 

But  the  wrongful  destruction  of  an  unstamped  paper  by  a 
person  against  whom  it  might  be  used  would  not  open  the  way 
to  parol  proof.     (1819)  Rippiner  v.  Wright,  2  B.  &  Aid.  479. 

"A  stamp  upon  an  oral  agreement  is  an  impossibility.  The 
passing  words  cannot  be  caught  and  subjected  to  a  material 
process.  A  stamp,  indeed,  might  be  purchased  and  cancelled 
whenever  parties  shall  make  an  oral  contract.  If  Congress  shall 
so  enact,  the  work  can  probably  be  performed.  They  have  as 
yet  enacted  only  that  agreements  in  writing  and  instruments 
shall  be  thus  dealt  with."  (1871)  Fish  v.  Cottenet,  44  N.  Y.  538, 
543;  (1869)  New  Haven  &  N.  Co.  v.  Quintard,  6  Abb.  Pr.  N.  S. 
128,  140. 

The  law  does  not  compel  persons  to  reduce  their  agreements 
to  writing.     Collins  on  the  Stamp  Laws  (Eng.  1841)   and  cases. 

In  the  many  cases  under  the  older  Acts,  both  invalidity  and 
penalty  were  made  to  turn  on  intent.  And,  now  that  the  in- 
validity feature  is  removed  from  all  these  sections,  the  question 


THE  WAR  REVENUE  LAW.  63. 

of  intent  to  evade  the  tax  will  principally  have  to  be  considered 
— even,  doubtless,  under  §  6  (and  compare  §  17,  post),  where  no 
reference  is  made  to  intent. 

The  purpose  of  all  such  tax  laws  is,  of  course,  to  get  revenue; 
and  the  object  of  all  the  imposed  penalties  is  to  prevent  the  loss, 
of  revenue.  It  was  never  in  contemplation  that  minor,  essen- 
tially innocent  defaults  in  so  technical  a  matter  should  be,  as 
such,  heavily  penalized.  A  mere  default  of  stamp  is  not  evidence 
of  intent,  though  the  Act  has  made  it  a  misdemeanor.  Else- 
where in  the  Act  and  in  other  laws,  the  absence  of  stamps  is 
made  prima  facie  proof  of  nonpayment  and  ground  for  forfeiture. 

There  are  endless  cases  on  the  necessity  of  showing  intent. 
Courts  became  impatient  at  being  called  upon  to  restate  the 
well-established  rule.  (1869)  Frink  v.  Thompson,  4  Lansing, 
489;  (1872)  Baker  v.  Baker,  6  Lansing,  509;  (1870)  Vaughan  v. 
O'Brien,  57  Barb.  491;  (1867)  Holyoke  M.  Co.  v.  Franklin  Co., 
97  Mass.  150;  (1870)  Morris  v.  McMorris,  44  Miss.  441;  (1869) 
Whitehill  v.  Shickle,  43  Mo.  537;  (1866)  Govern  v.  Littlefield,. 
13  Allen,  127;  (1869)  Weltner  v.  Riggs,  3  W.  Va.  445;  (1867) 
Hallock  V.  Jaudin,  34  Cal.  167;  (1872)  Works  v.  Hershey,  35 
Iowa,  340;  (1873)  Emery  v.  Hobson,  63  Me.  33;  (1874)  Oxford 
Iron  Co.  V.  Spradley,  51  Ala.  171;  (1867)  Hitchcock  v.  Sawyer, 
39  Vt.  412;  (1872)  State  v.  Hile,  30  Wis.  416;  (1867)  Harper  v, 
Clark,  17  Ohio  St.  190;  (1869)  New  Haven  &  N.  Co.  v.  Quintard, 
6  Abb.  Pr.  N.  S.  128,  137,  and  full  discussion  in  concurring 
opinion  at  p.  139.  The  burden  of  proof  to  show  intent  is  on  the 
party  objecting. 

"  Intent  is  the  essence  of  the  crime."  (1873)  U.  S.  v.  Buzzo, 
18  Wall.  125. 

Stamp  omission  would  not  invalidate  an  instrument  unless 
made  with  intent  to  defraud  the  government.  (1867)  Vorebeck 
v.  Roe,  50  Barb.  302;  (1869)  Howe  v.  Carpenter,  53  Barb.  382; 
see  (1867)  Coppernoll  v.  Ketcham,  56  Barb.  111. 

See  note  on  the  effect  of  stamp  omission  on  criminal  prosecu- 
tions in  46  L.  R.  A.  454. 

An  unstamped  paper  has  generally  been  admitted  in  criminal 
cases.     (1783)   Rex  v.  Hawkeswood,  1  Leach  Cro.  Ca.  257. 

A  defect  in  stamping  cannot  be  cured  by  any  agreement  be- 
tween parties.  (1834)  Owen  v.  Thomas,  3  Mylne  &  Keene,  353. 
The  English  courts  have  frowned  upon  such  attempts  as  com- 


64  THE  WAR  REVENUE  LAW. 

binations  to  defraud  the  revenue.  (1848)  Bennison  v.  Jewison, 
12  Jur.  485;    (1815)  Abraham  v.  Dubois,  4  Campbell,  269. 

The  British  Acts,  while  invalidating  some  instruments,  have 
been  liberal  regarding  papers  and  records  likely  to  be  needed  in 
evidence  in  court.  Griffith's  Stamp  Digest,  appendix  III,  p.  2o.;; 
Tilsley  on  Stamp  Laws,  pp.  5,  8,  54,  154,  188,  289,  citing  cases; 
Edwards  on  Stamp  Act,  p.  12;  (1834)  Rex  v.  Preston,  3  N.  & 
M.  31,  5  B.  &  Ad.  1028. 

There  has  been  a  gradual  tendency  to  relax  the  severity  of 
laws  making  unstamped  instruments  invalid.  The  Act  of  July 
1,  1862,  was  mitigated  by  that  of  July  14,  1862,  and  again  by 
Dec.  25,  1862,  and  by  March  3,  1863.  In  part,  doubtless,  these 
enabling  Acts  were  inspired  by  the  actual  scarcity  of  stamps 
at  certain  times  and  places.  Under  statutory  authority  the  de- 
partment in  1898  used  over-printed  "I  R  "  postage  stamps.  In 
the  present  instance  it  appears  that  the  administration,  confident 
that  the  Act  would  pass,  started  work  on  the  printing  of  new 
stamps  while  the  matter  was  before  Congress. 

As  to  the  limit  of  time  for  post-stamping.  (1871)  Pugh  v. 
McCormick,  14  Wall.  361. 

This  section  in  the  form  in  which  it  stood  in  the  Act  of  1898, 
§  13,  in  effect  superseded  R.  S.  3422,  which  was  left  in  the 
statutes  after  the  repeal  of  earlier  stamp  Acts  by  June  6,  1872, 
and  March  3,  1883.  Similarly,  the  1898  provisions  have  been 
deemed  continuing  law  for  the  post-stamping  of  papers  under  the 
Act  of  1898. 

The  twelve  months  limitation  of  the  second  proviso  applies 
only  to  the  remission  of  penalty.  Correction  under  penalty  may 
be  made  later.     T.  D.  21368,  July  10,  1899;   21539  of  1889. 

Personal  attendance  is  not  required.  Papers  may  be  sent  by 
mail,  with  an  affidavit.     T.  D.  20696  of  1889. 

There  is  no  such  provision  for  remitting  penalties  under 
Schedule  B. 

NOT  TO  BE  RECORDED  UNTIL  STAMPED. 

Sec.  12.  That  hereafter  no  instrument,  paper,  or 
document  required  by  law  to  be  stamped,  which 
has    been    signed    or    issued    without    being    duly 


THE  WAR  REVENUE  LAW.  65 

stamped,  or  with  a  deficient  stamp,  nor  any  copy- 
thereof,  shall  be  recorded  until  a  legal  stamp  or 
stamps,  denoting  the  amount  of  tax,  shall  have  been 
afl&xed  thereto,  as  prescribed  by  law:  Provided,  That 
any  bond,  debenture,  certificate  of  stock,  or  certifi- 
cate of  indebtedness  issued  in  any  foreign  country 
shall  pay  the  same  tax  as  is  required  by  law  on 
similar  instruments  when  issued,  sold,  or  transferred 
in  the  United  States;  and  the  party  to  whom  the 
same  is  issued,  or  by  whom  it  is  sold  or  transferred, 
shall,  before  selling  or  transferring  the  same,  affix 
thereon  the  stamp  or  stamps  indicating  the  tax 
required. 

Not  to  Be  Recorded  until  Stamped. 

Compare  Act  of  June  13,  1898,  ch.  448,  §  14;  Act  of  July  13, 
1866,  ch.  184;  Act  of  June  30,  1864,  §  163.  See  notes,  ante,  under 
§§  6,  9,  11  and  post,  §  13. 

This  is  one  of  the  sections  which  have  been  radically  changed  to 
meet  the  tendency  of  judicial  decisions.  The  language  stricken 
was  "  or  admitted,  or  used  as  evidence  in  any  court." 

It  is  obvious  that  Congress  might  make  laws  of  evidence  for 
federal  courts,  and  require  or  limit  registration  in  federal  offices. 
The  former  enactments  as  to  excluding  unstamped  papers  were 
therefore  binding  in  federal  practice.  State  courts,  however, 
wherever  the  matter  came  up  seriously,  held  that  Congress  might 
not  superimpose  rules  of  evidence  or  procedure  upon  State  tri- 
bunals and  administrative  offices. 

In  many  cases  where  the  question  did  not  present  itself  in 
this  aspect,  the  State  courts  seemed  to  acquiesce.  (1865)  Pies- 
singer  V.  Dupuy.  25  Ind.  419;  (1872)  Chartiers  Co.  v.  McNamara, 
72  Pa.  278;  (1865)  Day  v.  Barker,  36  Mo.  125;  (1865)  Carpenter 
V.  Johnson,  1  Nev.  331;  (1866)  Dorris  v.  Grace,  24  Ark.  326;  (1866) 
Beebe  v.  Hutton,  47  Barb.  187;  (1866)  Patterson  v.  Eames,  54 
Me.  203;  (1866)  Tobey  v.  Chipman.  13  Allen,  123;  (1867)  Knox 
v.  Hindepoper,   21  Wis.  527;    (1867)    Corbin  v.  Tracy,  34  Conn. 


QQ  THE  WAR  REVENUE  LAW. 

325;  (1867)  Cooke  v.  England,  27  Md.  14;  (1870)  Logan  v.  Dils. 
4  W.  Va.  397,  and  many  other  cases  where  documents  originally 
unstamped  were  post-stamped  and  there  was  no  fraudulent  in- 
tent. 

In  (1869)  New  Haven  &  N.  Co.  v.  Quintard,  6  Abb.  Pr.  N.  S. 
128,  143,  concurring  opinion  says:  "  In  the  case  of  (1867)  Myers 
V.  Smith,  48  Barb.  614,  the  court  did  not  notice  the  very  signifi- 
cant words  in  the  Act  '  with  intent  to  evade,'  etc.,  but  merely 
assumed  that  the  contract  was  Invalid  because  not  stamped." 

But  when  the  question  came  up  squarely  and  was  well  con- 
sidered, the  cases  everywhere  held  that  a  federal  tax  law  could 
not  make  rules  of  evidence  for  State  courts,  nor  interefere  with 
State  administrative  procedure.  (1904)  Tomlln  v.  Woods,  125 
Iowa,  367;  (1903)  Bryan  v.  First  Nat.  Bk.,  205  Pa.  7;  (1902)  Sulpho 
Bath  Co.  v.  Allen,  66  Neb.  295;  (1902)  Pierpont  v.  Johnson,  104 
111.  App.  27;  (1900)  Small  v.  Slocumb,  112  Ga.  279,  53  L.  R.  A. 
130;  (1900)  Cassidy  v.  St.  Germain,  22  R.  I.  53;  (1899)  Thomas 
v.  Texas,  40  Tex.  Crim.  App.  562,  46  L.  R.  A.  454;  (1899)  Knox 
v.  Rossi,  25  Nev.  96,  48  L.  R.  A.  305  (note)  ;  (1898)  Peo.  ex  rel. 
Brew.  Co.  v.  Fromme,  35  App.  Div.  N.  Y.  459;  (1872)  Moore  v. 
Moore,  47  N.  Y.  467;  (1870)  Barbour  v.  Gates,  43  N.  Y.  40;  (1870) 
Moore  v.  Quirk,  105  Mass.  49;  (1869)  Green  v.  Holway,  101  Mass. 
243;  (1867)  Latham  v.  Smith,  45  111.  29;  (1869)  Clemens  v.  Con- 
rad, 19  Mich.  170;  (1870)  Spooner  v.  Eifler,  1  Heisk.  Tenn.  633; 
(1870)  Wallace  v.  Craven,  34  Ind.  534;  (1871)  Davis  v.  Richard- 
son, 45  Miss  499;  (1906)  Amos-Richia  Co.  v.  N.  W.  Mut.  L.,  143 
Mich.  684. 

Under  the  Act  of  1898,  §  14,  unstamped  instruments  could  not 
be  received  in  evidence.  The  amending  Act  of  1901,  c.  806,  §  7» 
continued  the  tax  as  to  instruments  taxable  when  issued. 
Neither  the  Act  of  1901  nor  the  general  repealing  Act  of  1902, 
c.  500,  repealed  §  14  of  1898,  c.  448,  §  14.  (1904)  Sackett  v.  Mc- 
Caffrey, 131  Fed.  Rep.  219,  as  to  a  notary's  certificate  on  a  home- 
stead declaration,  which  was  held  inadmissible.  It  distinguishes 
(1870)  Buffington  v.  Day,  11  Wall.  113,  20  L.  Ed.  122  (tax  on  the 
salary  of  a  State  judicial  officer) ,  and  argues  that  such  a  notarial 
function  is  not  protected  by  the  self-preservation  autonomy  ac- 
corded the  States. 


THE  WAR  REVENUE  LAW.  QJ 

UNLAWFUL  TO  RECORD  OR  REGISTER  UN- 
LESS STAMPED. 

Sec.  13.  That  it  shall  not  be  lawful  to  record  or 
register  any  instrument,  paper,  or  document  re- 
quired by  law  to  be  stamped  unless  a  stamp  or 
stamps  of  the  proper  amount  shall  have  been  afl&xed 
and  canceled  in  the  manner  prescribed  by  law. 

Unlawful  to  Eecord  or  Register  Unless  Stamped. 

Compare  Act  of  June  13,  1898,  c.  448,  §  15;  Act  of  July  13, 
1866,  c.  184,  p.  141;  Act  of  June  30,  1864,  c.  173,  §  152.  See 
notes  under  §§  6,  11  and  12,  ante. 

The  record,  registry  or  transfer  was  formerly  excluded  from 
evidence.  Obviously  if  ttie  inhibition  against  recording  and  regis- 
tration can  be  enforced  by  the  other,  remaining  penalties,  there 
would  be  no  record  or  register  to  offer  in  evidence;  and  there 
may  be  situations  where  record  or  registry  may  be,  of  them- 
selves, almost  as  important  as  their  acceptance  in  evidence. 
The  law  was  doubtless  changed  because  Congress  could  not 
superimpose  rules  of  evidence  upon  State  courts.  The  prohibi- 
tion against  registering  remains  in  this  Act,  but  it  is  likely  to 
be  refused  applicablity  to  records  and  registers  outside  the  ex- 
clusive federal  jurisdiction.  Congress  has  no  better  right  to 
prescribe  rules  here  than  in  the  matter  of  evidence.  It  may  b© 
able,  as  in  instances  much  complained  of,  to  compel  corpora- 
tions to  help  enforce  its  tax  laws;  but  it  can  hardly  require 
administrative  officers  of  a  State  or  local  government  to  pass 
upon  the  fact  or  sufficiency  of  a  compliance  with  a  stamp  tax. 
Cf.  the  first  proviso  in  §  15,  post. 

Section  9  uses  the  language,  "  make,"  etc.,  "  or  cause  to  be 
made,"  etc.  So  §  11,  "  register,"  etc.,  "  or  cause,"  etc.  §§  12 
and  13  do  not  make  a  similar  inclusion. 

"A  failure  to  comply  with  the  War  Revenue  Law  is  a  matter 
with  which  the  register  has  nothing  to  do.  The  duty  of  the 
register  is  to  record  or  file  in  his  office  those  instruments  or  pa- 
pers which,  by  the  laws  of  the  State,  are  entitled  to  be  recorded 
or  filed.    *     *    *    The  responsibility  of  seeing  that  the  proper 


68  THE  WAR  REVENUE  LAW. 

stamp  is  affixed  rests  upon  the  parties  to  the  instrument,  and 
the  register  is  no  more  required  to  determine  the  validity,  un- 
der the  U.  S.  War  Revenue  Law,  of  an  instrument  offered 
for  record  than  would  be  to  determine  whether  a  deed  offered 
for  record  contravened  some  statute  of  the  State  or  was  offered 
for  the  purpose  of  defrauding  creditors  or  for  any  other  reason 
was  invalid  and  void.  To  hold  that  such  a  duty  rested  upon 
the  register  would  be  to  constitute  him  a  judicial  instead  of  a 
ministerial  officer."  (1898)  Peo.  ex  rel.  Brewing  Co.  v.  Fromme, 
35  App.  Div.  N.  Y.  459. 

The  earlier  Acts  made  the  record,  etc.,  "  utterly  void."  This 
was  changed  in  1898  to  inadmissibility,  which  is  now  dropped. 
The  general  prohibition  against  recording  was  formerly  en- 
forced in  some  States.     (1867)  McBride  v.  Doty,  23  Iowa,  122. 

Under  the  severe  early  Act  a  mortgage  insufficiently  stamped 
was  void.     (1865)  Hoppock  v.  Plato,  30  How.  Pr.  120. 

A  chattel  mortgage,  being  merely  filed  and  not  recorded,  was 
lield  not  taxable.     (1867)  Vail  v.  Knapp,  49  Barb.  299. 

All  mortgages  were  taxed  by  the  Act  of  1898,  but  in  1914 
Congress  has  made  a  special  effort  to  avoid  the  taxation  of  such 
instruments.  It  struck  mortgages  from  Schedule  A,  post,  and 
see  proviso  in  the  paragraph  on  conveyances  in  that  schedule. 


KIND   OF   DOCUMENTARY   STAMP   NOT   ES- 
SENTIAL. 

Sec.  14.  That  no  instrument,  paper,  or  document 
required  by  law  to  be  stamped  shall  be  deemed  or 
held  invalid  and  of  no  effect  for  the  want  of  a  par- 
ticular kind  or  description  of  stamp  designated  for 
and  denoting  the  tax  charged  on  any  such  instru- 
ment, paper,  or  document,  provided  a  legal  docu- 
mentary stamp  or  stamps  denoting  a  tax  of  equal 
amount  shall  have  been  duly  affixed  and  used 
thereon. 


THE  WAR  REVENUE  LAW.  69 

Kind  of  Documentary  Stamp  Not  EssentiaL 

Cf.  Act  of  June  13,  1898,  c.  448,  §  16;  Act  of  June  30,  1864,  c. 
173,  §  153. 

In  1864  proprietary  stamps  were  expressly  not  to  be  used.  The 
same  distinction  is  now  made  by  requiring  documentary  stamps. 
These  latter  belong  to  Schedule  A,  and  the  former  to  Schedule  B. 

In  view  of  the  changes  in  the  preceding  sections,  this  whole 
section  would  seem,  at  least  so  far  as  documents  are  concerned, 
a  mere  vestigium.  But  in  any  event  it  is  merely  a  precaution 
in  recognition  of  the  ordinary  person's  lack  of  expert  knowl- 
edge of  stamps.  It  is  doubtful  if,  despite  its  broad  language, 
a  tobacco  or  oleomargarine  stamp  would  suffice  for  a  broker's 
note,  although  something  analogous  was  ruled  under  an  early 
Act  when  stamps  were  scarce. 

FEDERAL,  STATE  AND  LOCAL  SECURITIES 
EXEMPT;  ALSO  CERTAIN  ASSOCIATIONS, 
ETC. 

Sec.  15.  That  all  bonds,  debentures,  or  certificates 
of  indebtedness  issued  by  the  officers  of  the  United 
States  Government,  or  by  the  officers  of  any  State, 
county,  town,  municipal  corporation,  or  other  cor- 
poration exercising  the  taxing  power,  shall  be,  and 
hereby  are,  exempt  from  the  stamp  taxes  required  by 
this  Act:  Provided,  That  it  is  the  intent  hereby  to 
exempt  from  the  stamp  taxes  imposed  by  this 
Act  such  State,  county,  town,  or  other  municipal 
corporations  in  the  exercise  only  of  functions 
strictly  belonging  to  them  in  their  ordinary  govern- 
mental, taxing,  or  municipal  capacity:  Provided  fur- 
ther. That  stock  and  bonds  issued  by  cooperative 
building  and  loan  associations,  mutual  ditch  or  irri- 
gating companies,  and  building  and  loan  associa- 
tions or  companies  that  make  loans  only  to  their 


70  THE  WAR  REVENUE  LAW. 

shareholders,  shall  be  exempt  from  the  tax  herein 
provided. 

Federal,  State  and  Local  Securities  Exempt;  Also  Certain  Co- 
operatire  Associations,  etc 

Cf.  Act  of  June  13,  1898,  c.  448,  §  17;  July  13,  1866,  c.  184; 
June  30,  1864,  c.  173,  §  154;  R.  S.  1878,  §  3420.  Act  of  Dec.  23, 
1862. 

This  appears  to  apply  primarily  to  securities,  but  Congress 
has  no  power  to  tax  any  of  the  governmental  instrumentalities 
of  a  State.  The  proviso  is  much  wider  than  the  original  text 
of  the  section.  "  Functions  in  their  governmental,  taxing  or 
municipal  capacity,"  would  include  all  legitimate  governmental 
instrumentalities.  And  the  enumeration  here  of  "  taxing  "  along 
with  "  governmental "  should  prevent  any  narrowing  of  the  sec- 
tion's meaning  to  limit  it  to  securities. 

A  State  tax  deed  exempt.  (1867)  Sayles  v.  Davis,  22  Wis.  225; 
(1869)  Delorme  v.  Ferk,  24  Wis.  201.  An  order  of  county  com- 
missioners.    (1866)  Nave  v.  King,  27  Ind.  356. 

A  sheriff's  official  board  exempt.  (1869)  State  v,  Garton,  32 
Ind.  1.  Also  sheriff's  certificate  of  appraisal  of  realty  for  a 
judicial  sale.     (1902)  Noble  v.  Citizens'  Bk.,  63  Neb.  847. 

Government  disbursing  checks  under  an  earlier  Act  were  not 
taxable.     Op.  Atty.-Gen.  XXII,  134. 

The  ordinary  notarial  acknowledgment,  as  on  a  declaration  of 
liomestead,  is  not  a  judicial  act  and  is  not  excepted.  This,  how- 
ever, was  in  a  federal  court.  (1904)  Sackett  v.  McCaffrey,  131 
Fed.  Rep.  219.    See  this  case  as  cited,  ante,  under  §  12. 

But  a  notarial  certificate  on  a  deposition  need  not  be  stamped. 
(1866)  Prather  v.  Pritchard,  26  Ind.  65  (under  Act  of  1864); 
(1900)  Stirneman  v.  Smith,  100  Fed.  Rep.  600  (under  Act  of 
1898);  (1902)  McNally  v.  Field,  119  Fed.  Rep.  445,  the  bond  of 
an  administrator,  which  is  an  indispensable  part  of  the  State's 
judicial  system. 

Nor  a  bond  required  to  be  given  by  an  applicant  for  saloon 
license.  (1900)  U.  S.  v.  Owens,  100  Fed.  Rep.  70;  (1902)  Am- 
brosini  v.  U.  S.,  187  U.  S.  1. 

Nor  a  bond  required  of  a  notary.  (1900)  Warwick  v.  Bettman, 
102  Fed.  Rep.  127,  108  id.  46. 


THE  WAR  REVENUE  LAW.  71 

But  the  exemption  does  not  apply  where  a  State  conducts  an 
ordinary  business,  such  as  the  liquor  dispensary  system. 
(1905)  South  Carolina  v.  U.  S.,  199  U.  S.  437. 

The  whole  question  of  public  ownership  of  utilities  may  yet 
come  to  be  entangled  with  the  power  of  Congress  to  tax. 

STAMP  PROVISIONS  MADE  APPLICABLE  TO 
SCHEDULE  B. 

Sec.  16.  That  all  the  provisions  of  this  Act  relat- 
ing to  dies,  stamps,  adhesive  stamps,  and  stamp 
taxes  shall  extend  to  and  include  (except  where 
manifestly  inapplicable)  all  the  articles  or  objects 
enumerated  in  Schedule  B,  subject  to  stamp  taxes, 
and  apply  to  the  provisions  in  relation  thereto. 

Stamp  ProTisions  Made  Applicable  to  Schedule  B. 

Cf.  Act  of  June  13,  1898,  §  19;  June  30,  1864,  §  164;  July  1, 
1862,  §  106. 

This  refers  to  administrative  matters  and  to  counterfeiting, 
etc.;  and  especially  in  earlier  Acts,  to  the  provisions  for  im- 
printing stamps,  as  on  check  books,  etc.  It  is  one  of  the  gen- 
eral inclusive  provisions  which  are  needed  for,  and  necessary 
for  shortening,  elaborate  Acts  and  are  often  retained  when  the 
law  is  simplified.  It  carries  over  the  provisions  of  §  23,  post 
(which  see),  making  other  laws  applicable  to  all  of  the  present 
Act. 

PERFUMERY,  COSMETICS,  ETC. 

Sec.  17.  That  on  and  after  December  first,  nine- 
teen hundred  and  fourteen,  any  person,  firm,  com- 
pany, or  corporation  that  shall  make,  prepare,  and 
sell,  or  remove  for  consumption  or  sale,  perfumery, 
cosmetics,  preparations,  compositions,  articles,  or 
things  upon  which  a  tax  is  imposed  by  this  Act,  as 


72  THE  WAR  REVENUE  LAW. 

provided  for  in  Schedule  B,  without  affixing  thereto 
an  adhesive  stamp  or  label  denoting  the  tax  before 
mentioned  shall  be  deemed  guilty  of  a  misdemeanor, 
and  upon  conviction  thereof  shall  pay  a  fine  of  not 
more  than  $500,  or  be  imprisoned  not  more  than  six 
months,  or  both,  at  the  discretion  of  the  court. 

Perfumery,  Cosmetics,  etc. 

Cf.  Act  of  June  13,  1898,  §  20;  R.  S.  1878,  §§  3430,  3436;  Act 
of  1866  (14  Stat.  148);  Act  of  June  30,  1864,  §  165;  July  1,  1862. 
§  107. 

The  original  House  bill  had  no  Schedule  B.  The  Senate 
amended  it  to  include  proprietary  medicines  and  articles,  much 
as  in  1898.  The  present  compromise  was  finally  adopted.  By 
eliminating  drugs,  etc.,  it  removes  many  troublesome  questions 
such  as  were  disputed  and  even  litigated  under  the  Act  of  1898. 

The  mere  omission  incurs  the  penalty.  There  is  no  question 
of  intent.  This  is  analogous  to  §  6,  ante.  See  notes  under  §  18, 
post. 

"Any  similar  articles  "  and  "  or  any  similar  substance  or  ar- 
ticle," are  phrases  which  will  revive  some  of  the  troubles  of 
1898.  There  is  no  mention  of  wrongful  intent,  and  the  most 
willing  taxpayer  may  easily  offend  through  the  mere  difficulty  of 
identifying  and  distinguishing  the  things  taxed.  Both  the  trade 
and  the  department  have  had  experience  under  the  Act  of  1898, 
and  general  rulings  of  the  commissioner  will  doubtless  promptly 
simplify  the  matter. 

Under  the  Act  of  1866,  an  indictment  would  lie  for  selling  a 
box  of  sardines  without  proper  stamping.  (1869)  U.  S.  v.  Abbott, 
9  Int.  Rev.  Rec.  186  (1  Circ,  Mass.).  See  under  Act  of  1864. 
(1882)  U.  S.  V.  Moore,  11  Fed.  Rep.  248.  Action  to  recover 
penalty  under  Act  of  1864  for  selling  unstamped  matches.  (1867) 
U.  S.  V.  Walsh,  1  Abb.  U.  S.  66. 


THE  WAR  REVENUE  LAW.  73 

REMOVAL    OF    STAMPS;    ILLEGAL    USE    OF 
STAMPS,  ETC. 

Sec.  18.  That  any  manufacturer  or  maker  of  any 
of  the  articles  for  sale  mentioned  in  Schedule  B, 
after  the  same  shall  have  been  so  made,  and  the  par- 
ticulars hereinbefore  required  as  to  stamps  have 
been  complied  with,  or  any  other  person  who  shall 
take  off,  remove,  or  detach,  or  cause,  or  permit,  or 
suffer  to  be  taken  off,  or  removed  or  detached,  any 
stamp,  or  who  shall  use  any  stamp,  or  any  wrapper 
or  cover  to  which  any  stamp  is  affixed,  to  cover  any 
other  article  or  commodity  than  that  originally  con- 
tained in  such  wrapper  or  cover,  with  such  stamp 
when  first  used,  with  the  intent  to  evade  the  stamp 
duties,  shall  for  every  such  article,  respectively,  in 
respect  of  which  any  such  offense  shall  be  committed, 
be  deemed  guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof  shall  pay  a  fine  of  not  more  than 
$500,  or  be  imprisoned  not  more  than  six  months,  or 
both,  at  the  discretion  of  the  court,  and  every  such 
article  or  commodity  as  aforesaid  shall  also  be  for- 
feited. 

Removal  of  Stamps;  Illegal  Use  of  Stamps,  etc 

Cf.  Act  of  June  13,  1898,  §  21;  June  30,  1864,  §166;  July  1, 
1862,  §  108;  R.  S.  §  3431. 

Here,  as  in  Schedule  A,  a  general  imposition  of  penalty  with- 
out question  of  intent  is  followed  by  others  where  Intent  is  nec- 
essary.    Cf.  notes  under  §  11,  ante. 

In  this  and  the  next  section,  both  having  "  intent  to  evade," 
a  forfeiture  of  the  articles  is  added  to  other  penalties.  For- 
feiture is  common  in  other  revenue  laws,  both  customs  and  ex- 
tise.     It  affords  the  quickest  way  of  making  the  law  felt  by  the 


74  THE  WAR  REVE^^UE  LAW. 

person  seeking  to  evade  its  operation.  Earlier  Acts  relied,  here 
as  in  Schedule  A,  more  on  penalties.  The  new  method  is  to 
make  the  offence  a  misdemeanor.     These  misdemeanors  are: 

Section  17  regardless  of  intent. 

Section  18  with  intent  to  evade. 

Section  19  to  evade  the  tax. 

Section  20  false  or  untrue  declaration;  and  this  section  im- 
poses a  forfeiture  for  neglect,  regardless  of  intent. 


SALE  OR  REMOVAL  OF  UNSTAMPED  ARTI- 
CLES; EXPORTATION. 

Sec.  19.  That  any  maker  or  manufacturer  of  any 
of  the  articles  or  commodities  mentioned  in 
Schedule  B,  as  aforesaid,  or  any  other  person  who 
shall  sell,  send  out,  remove,  or  deliver  any  article 
or  commodity,  manufactured  as  aforesaid,  before 
the  tax  thereon  shall  have  been  fully  paid  by  affixing 
thereon  the  proper  stamp,  as  in  this  Act  provided, 
or  who  shall  hide  or  conceal,  or  cause  to  be  hidden 
or  concealed,  or  who  shall  remove  or  convey  away, 
or  deposit,  or  cause  to  be  removed  or  conveyed  away 
from  or  deposited  in  any  place,  any  such  article  or 
commodity,  to  evade  the  tax  chargeable  thereon, 
or  any  part  thereof,  shall  be  deemed  guilty  of  a  mis- 
demeanor, and  upon  conviction  thereof  shall  pay  a 
fine  of  not  more  than  $500,  or  be  imprisoned  not  more 
than  six  months,  or  both,  at  the  discretion  of  the 
court,  together  with  the  forfeiture  of  any  such  article 
or  commodity:  Provided,  That  articles  upon  which 
stamp  taxes  are  required  by  this  Act  may,  when  in- 
tended for  exportation,  be  manufactured  and  sold 
or  removed  without  having  stamps  affixed  thereto, 


THE  WAR  REVENUE  LAW.  75 

and  without  being  charged  with  tax  as  aforesaid; 
and  every  manufacturer  or  maker  of  any  article  as 
aforesaid,  intended  for  exportation,  shall  give  such 
bonds  and  be  subject  to  such  rules  and  regulations 
to  protect  the  revenue  against  fraud  as  may  be  from 
time  to  time  prescribed  by  the  Commissioner  of  In- 
ternal Revenue,  with  the  approval  of  the  Secretary 
of  the  Treasury. 

Sale  or  BemOTal  of  Unstamped  Articles;   Exportation  Exempt 
under  Bond. 

Cf.  Act  of  June  13,  1898,  §  22;  June  30,  1864,  §§  167,  168;  amend. 
March  3,  1865;  Act  of  July  1,  1862,  §  109;  R.  S.  §  3433. 

This  section  is  similar  to  R.  S.  §  3296,  as  to  unlawful  removal 
or  concealment  of  spirits.  A  person  might  be  convicted  under 
§  18  for  detaching  a  stamp  once  affixed  to  an  article;  then  under 
§  19  for  removing  or  concealing  the  unstamped  article;  and  then 
under  §  17  for  selling  the  article  without  paying  the  tax.  The 
offenses  are  different  and  the  Fifth  Amendment  might  not  save 
him.  See  (1890)  U.  S.  v.  3  Stills,  47  Fed.  Rep.  495;  (1897) 
Pounds  v.  U.  S.,  171  U.  S.  35;  (1902)  Pilcher  v.  U.  S.,  113  Fed. 
Rep.  248. 

Early  Acts,  e.  g.,  1864,  as  some  other  portions  of  more  recent 
internal  revenue  laws,  provided  expressly  for  bonded  factories 
and  warehouses  for  exportations.  Such  matters  are  now  left  to 
department  regulations.     See  under  Schedule  B,  post. 

As  to  drawbacks  on  exportations  (1873)  U.  S.  v.  237  Boxes, 
6  Ben.  543.  And  see  under  Schedule  B,  post.  Cf.  notes  under 
§§  17  and  18,  ante. 


MONTHLY  DECLARATION  OF  COMPLIANCE. 

Sec.  20.  That  every  manufacturer  or  maker  of  any 
of  the  articles  or  commodities  provided  for  in 
Schedule  B,  or  his  foreman,  agent,  or  superintendent 
shall  at  the  end  of  each  and  every  month  make,  sign, 


76  THE  WAR  REVENUE  LAW. 

and  file  with  the  collector  of  internal  revenue  for 
the  district  in  which  he  resides  a  declaration  in 
writing  that  no  such  article  or  commodity  has,  dur- 
ing such  preceding  month  or  time  when  the  last 
declaration  was  made,  been  removed,  or  carried,  or 
sent,  or  caused  or  suffered  or  known  to  have  been 
removed,  carried,  or  sent  from  the  premises  of  such 
manufacturer  or  maker  other  than  such  as  have 
been  duly  taken  account  of  and  charged  with  the 
stamp  tax,  on  pain  of  such  manufacturer  or  maker 
forfeiting  for  every  refusal  or  neglect  to  make  such 
declaration  $100;  and  if  any  such  manufacturer  or 
maker,  or  his  foreman,  agent,  or  superintendent, 
shall  make  any  false  or  untrue  declaration,  such 
manufacturer  or  maker,  or  foreman,  agent,  or  su- 
perintendent making  the  same  shall  be  deemed 
guilty  of  a  misdemeanor,  and  upon  conviction  shall 
pay  a  fine  of  not  more  than  $500,  or  be  imprisoned 
not  more  than  six  months,  or  both,  at  the  discretion 
of  the  court. 

Monthly  Declaration  of  Compliance. 

Cf.  Act  of  June  13,  1898,  §  23;   July  1,  1862,  §  110. 

This  applies  to  manufacturers,  not  to  dealers.  What  is  re- 
quired is  not  a  statement  of  business  done,  nor  a  report  of  manu- 
facturers or  of  transactions,  during  the  period.  It  is  a  device, 
such  as  is  used  elsewhere  in  revenue  legislation  (and  in  cross- 
examination!),  to  "corner"  the  offender.  The  penalty  is  im- 
posed in  terms  for  any  "  false  or  untrue  declaration,"  without 
regard  to  whether  the  person  knows  it  to  be  false.  One  object 
is,  of  course,  to  compel  or  constrain  careful  attention  to  a  matter 
which  might  otherwise  be  neglected  with  no  wrong  intent  but 
with  great  loss  of  revenue.  See  notes  under  §  17,  ante,  as  to  the 
maker's  possible  and  probable  honest  difficulty  of  determining: 


THE  WAR  REVENUE  LAW.  77 

precisely  tchat  he  is  legally  required  to  declare.  "  No  such 
article  "  raises  many  questions  of  definition  which  the  Act  itself 
does  not  answer.     See  Schedule  B,  i)ost,  for  details. 

It  is  not  a  prerequisite  to  the  addition  of  the  penalty  that  the 
return  should  be  willfully  false.  (1878)  German  Sav.  Bk.  v. 
Archbold,  15  Blatch.  398. 

APPLIES  TO  DEALERS  IN  DOMESTIC  AND 
FOREIGN  ARTICLES  AS  WELL  AS  MANU- 
FACTURERS; IMPORTED  ARTICLES  PAY 
DUTY  AND  STAMP  TAX. 

Sec.  21.  That  the  stamp  taxes  prescribed  in  this 
Act  on  the  articles  provided  for  in  Schedule  B  shall 
attach  to  all  such  articles  and  things  sold  or  removed 
for  sale  thirty  days  after  the  approval  of  this  Act. 
Every  person,  except  as  otherwise  provided  in  this 
Act,  who  offers  or  exposes  for  sale  any  article  or 
thing  provided  for  in  said  Schedule  B,  whether  the 
article  so  offered  or  exposed  is  of  foreign  manufac- 
ture and  imported  or  of  domestic  manufacture,  shall 
be  deemed  the  manufacturer  thereof,  and  shall  be 
subject  to  all  the  taxes,  liabilities,  and  penalties  im- 
posed by  law  for  the  sale  of  articles  without  the  use 
of  the  proper  stamp  denoting  the  tax  paid  thereon; 
and  all  such  articles  of  foreign  manufacture  shall, 
in  addition  to  the  import  duty  imposed  on  the  same, 
be  subject  to  the  stamp  tax  prescribed  in  this  Act: 
Provided  further,  That  internal  revenue  stamps  re- 
quired by  existing  law  on  imported  merchandise 
shall  be  aflBxed  thereto  and  canceled  at  the  expense 
of  the  owner  or  importer  before  the  withdrawal  of 
such  merchandise  for  consumption,  and  the  Secre- 


78  THE  WAR  REVENUE  LAW. 

tary  of  the  Treasury  is  authorized  to  make  such 
rules  and  regulations  as  may  be  necessary  for  the 
affixing  and  canceling  of  such  stamps,  not  inconsis- 
tent herewith. 

Applies  to  Dealers  in  Domestic  aud  Foreign  Articles  as  Well  as 
Manufacturers;  Imported  Articles  Pay  Duty  and  Stamp  Tax. 

Cf.  Act  of  June  13,  1898,  §  24;  June  30,  1864,  §  169;  March  3, 
1863,  §  27;  R.  S.  §  3435;  (1867)  Cardinal  v.  Smith,  Deady,  197, 
under  a  feature  of  the  1866  Act  now  altered. 

In  this  case  the  court  commented  on  the  fact  that  the  com- 
missioner had  ruled  both  ways  on  a  point.  It  suggested  that 
"  the  commissioner,  as  a  matter  of  public  policy,  might  instruct 
his  subordinates  to  refrain  from  enforcing  this  provision  "  ac- 
cording to  an  acknowledgedly  doubtful  construction,  in  order  to 
avoid  "  unprofitable  litigation."  By  the  original  ruling  nine- 
tenths  of  the  goods  in  question  had  probably  paid  the  tax.  The 
court  said  "  a  department  ruling  made  under  such  circumstances 
and  from  such  motives,  well  enough  in  itself,  can  have  but  little 
weight  in  a  court." 


STAMPS;      PREPARATION,      DISTRIBUTION, 
CANCELLATION;    DISCOUNT    ON    STAMP 
SALES. 
Sec.  22.  That  the  Commissioner  of  Internal  Reve- 
nue shall  cause  to  be  prepared  and  distributed  for 
the  payment  of  the  taxes  prescribed  in  this  Act  suit- 
able stamps  denoting  the  tax  on  the  document,  arti- 
cle, or  thing  to  which  the  same  may  be  affixed,  and 
he  is  authorized  to  prescribe  such  method  for  the 
cancellation  of  said  stamps,  as  substitute  for  or  in 
addition  to  the  method  provided  in  this  Act,  as  he 
may   deem   expedient.     The    Commissioner   of   In- 
ternal Revenue,  with  approval  of  the  Secretary  of 


THE  WAR  REVENUE  LAW.  7^ 

the  Treasury,  is  authorized  to  procure  any  of  the 
stamps  provided  for  in  this  Act  by  contract  when- 
ever such  stamps  can  not  be  speedily  prepared  by 
the  Bureau  of  Engraving  and  Printing;  but  this  au- 
thority shall  expire  on  the  first  day  of  November, 
nineteen  hundred  and  fifteen,  except  as  to  imprinted 
stamps  furnished  under  contract,  authorized  by  the 
Commissioner  of  Internal  Revenue.  That  the  ad- 
hesive stamps  used  in  the  payment  of  the  tax  levied 
in  Schedules  A  and  B  of  this  Act  shall  be  furnished 
for  sale  by  the  several  collectors  of  internal  revenue, 
who  shall  sell  and  deliver  them  at  their  face  value 
to  all  persons  applying  for  the  same,  except  officers 
or  employees  of  the  Internal  Revenue  Service: 
Provided,  That  such  collectors  may  sell  and  deliver 
such  stamps  in  quantities  of  not  less  than  $100  of 
face  value,  with  a  discount  of  one  per  centum,  ex- 
cept as  otherwise  provided  in  this  Act. 

Stamps;    Preparation,   Distribntion,   Cancellation;    Discount  on 
Stamp  Sales. 

Cf.  Act  of  June  13,  1898,  §  25;  June  30,  1864,  §§  161,  170. 

For  general  provisions  as  to  stamps,  see  R.  S.  §  321,  S  3238' 
(special  tax  stamps),  §  3328  (wines),  §  3341  (beer),  §  3369 
(tobacco),  §  3395  (cigars),  etc.,  and  principally  §§  3445,  3446,  as 
amended  by  20  Stat.  327,  giving  the  commissioner  power  ta 
establish  and  alter  any  stamps. 

"Such  stamps,"  to  be  sold  with  a  1%  discount,  were  ruled  to 
apply  to  adhesive  stamps,  and  not  to  imprinted  documentary 
stamps  nor  to  proprietary  stamps  from  private  dies.  T.  D. 
19747,  July  22,  1898. 

Stamps  are  sold,  not  only  at  a  discount,  but,  in  certain  cases^ 
on  credit.     (1880)  U.  S.  v.  (holdback,  102  U.  S.  623,  R.  S.  §  3425. 


go  THE  WAR  REVENUE  LAW. 

SCHEDULE  A. 

STAMP  TAXES. 

Bonds,  debentures,  or  certificates  of  indebtedness 
issued  on  and  after  the  first  day  of  December,  nine- 
teen hundred  and  fourteen,  by  any  association,  com- 
pany, or  corporation,  on  each  $100  of  face  value  or 
fraction  thereof,  5  cents,  and  on  each  original  issue, 
whether  on  organization  or  reorganization,  of  cer- 
tificates of  stock  by  any  such  association,  company,  or 
corporation,  on  each  $100  of  face  value  or  fraction 
thereof,  5  cents,  and  on  all  sales,  or  agreements  to 
sell,  or  memoranda  of  sales  or  deliveries  or  transfers 
of  shares  or  certificates  of  stock  in  any  association, 
company,  or  corporation,  whether  made  upon  or 
shown  by  the  books  of  the  association,  company,  or 
corporation,  or  by  any  assignment  in  blank,  or  by 
any  delivery,  or  by  any  paper  or  agreement  or  mem- 
orandum or  other  evidence  of  transfer  or  sale, 
whether  entitling  the  holder  in  any  manner  to  the 
benefit  of  such  stock,  or  to  secure  the  future  pay- 
ment of  money  or  for  the  future  transfer  of  any 
stock,  on  each  $100  of  face  value  or  fraction  thereof, 
2  cents:  Provided^  That  it  is  not  intended  by  this 
Act  to  impose  a  tax  upon  an  agreement  evidencing 
a  deposit  of  stock  certificates  as  collateral  security 
for  money  loaned  thereon,  which  stock  certificates 
are  not  actually  sold,  nor  upon  such  stock  certifi- 
cates so  deposited:   Provided  further.  That  in  case 


THE  WAR  REVENUE  LAW.  81 

of  sale  where  the  evidence  of  transfer  is  shown  only 
by  the  books  of  the  company  the  stamp  shall  be 
placed  upon  such  books;  and  where  the  change  of 
ownership  is  by  transfer  certificate  the  stamp  shall 
be  placed  upon  the  certificate;  and  in  cases  of  an 
agreement  to  sell  or  where  the  transfer  is  by  de- 
livery of  the  certificate  assigned  in  blank  there  shall 
be  made  and  delivered  by  the  seller  to  the  buyer  a 
bill  or  memorandum  of  such  sale,  to  which  the  stamp 
shall  be  affixed;  and  every  bill  or  memorandum  of 
sale  or  agreement  to  sell  before  mentioned  shall 
show  the  date  thereof,  the  name  of  the  seller,  the 
amount  of  the  sale,  and  the  matter  or  thing  to  which 
it  refers.  And  any  person  or  persons  liable  to  pay 
the  tax  as  herein  provided,  or  anyone  who  acts  in 
the  matter  as  agent  or  broker  for  such  person  or  per- 
sons, who  shall  make  any  such  sale,  or  who  shall  in 
pursuance  of  any  such  sale  deliver  any  such  stock, 
or  evidence  of  the  sale  of  any  such  stock  or  bill  or 
memorandum  thereof,  as  herein  required,  without 
having  the  proper  stamps  affixed  thereto,  with  in- 
tent to  evade  the  foregoing  provisions  shall  be 
deemed  guilty  of  a  misdemeanor,  and  upon  convic- 
tion thereof  shall  pay  a  fine  of  not  exceeding  $1,000, 
or  be  imprisoned  not  more  than  six  months,  or  both, 
at  the  discretion  of  the  court. 

Upon  each  sale,  agreement  of  sale,  or  agreement 
to  sell,  any  products  or  merchandise  at  any  ex- 
change, or  board  of  trade,  or  other  similar  place, 
either  for  present  or  future  delivery,  for  each  $100 
in  value  of  said  sale  or  agreement  of  sale  or  agree- 


g2  THE  WAR  REVENUE  LAW. 

ment  to  sell,  1  cent,  and  for  each  additional  $100 
or  fractional  part  thereof  in  excess  of  $100,  1  cent: 
Provided:,  That  on  every  sale  or  agreement  of  sale 
or  agreement  to  sell  as  aforesaid  there  shall  be  made 
and  delivered  by  the  seller  to  the  buyer  a  bill,  mem- 
orandum, agreement,  or  other  evidence  of  such  sale, 
agreement  of  sale,  or  agreement  to  sell,  to  which 
there  shall  be  affixed  a  lawful  stamp  or  stamps  in 
value  equal  to  the  amount  of  the  tax  on  such  sale. 
And  every  such  bill,  memorandum,  or  other  evidence 
of  sale  or  agreement  to  sell  shall  show  the  date 
thereof,  the  name  of  the  seller,  the  amount  of  the 
sale,  and  the  matter  or  thing  to  which  it  refers ;  and 
any  person  or  persons  liable  to  pay  the  tax  as  herein 
provided,  or  anyone  who  acts  in  the  matter  as  agent 
or  broker  for  such  person  or  persons,  who  shall 
make  any  such  sale  or  agreement  of  sale,  or  agree- 
ment to  sell,  or  who  shall,  in  pursuance  of  any  such 
sale,  agreement  of  sale,  or  agreement  to  sell,  deliver 
any  such  products  or  merchandise  without  a  bill, 
memoranduin,  or  other  evidence  thereof  as  herein 
required,  or  who  shall  deliver  such  bill,  memoran- 
dum, or  other  evidence  of  sale,  or  agreement  to  sell, 
without  having  the  proper  stamps  affixed  thereto, 
with  intent  to  evade  the  foregoing  provisions,  shall 
be  deemed  guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof  shall  pay  a  fine  of  not  exceeding 
$1,000,  or  be  imprisoned  not  more  than  six  months, 
or  both,  at  the  discretion  of  the  court. 

That  no  bill,  memorandum,  agreement,  or  other 
evidence  of  such  sale,  or  agreement  of  sale,  or  agree- 


THE  WAR  REVENUE  LAW.  83 

ment  to  sell,  in  case  of  products  or  merchandise  ac- 
tually delivered  at  the  time  of  sale  or  while  in  ves- 
sel, boat,  or  car,  and  actually  in  course  of  transpor- 
tation, shall  be  subject  to  this  tax,  provided  such 
bill,  memorandum,  agreement,  or  other  evidence  of 
such  sale,  or  agreement  of  sale,  or  agreement  to  sell 
shall  be  accompanied  by  bills  of  lading  or  vouchers 
showing  that  the  said  products  are  actually  in  course 
of  transportation  as  aforesaid. 

Promissory  notes,  except  bank  notes  issued  for 
circulation,  and  for  each  renewal  of  the  same,  for 
a  sum  not  exceeding  $100,  2  cents;  and  for  each  ad- 
ditional $100  or  fractional  part  thereof  in  excess  of 
$100,  2  cents. 

Express  and  freight :  It  shall  be  the  duty  of  every 
railroad  or  steamboat  company,  carrier,  express 
company,  or  corporation  or  person  whose  occupation 
is  to  act  as  such,  to  issue  to  the  shipper  or  consignor, 
or  his  agent,  or  person  from  whom  any  goods  are 
accepted  for  transportation  where  a  charge  exceed- 
ing 5  cents  is  made  a  bill  of  lading,  manifest,  or  other 
evidence  of  receipt  and  forwarding  for  each  ship- 
ment received  for  carriage  and  transportation, 
whether  in  bulk  or  in  boxes,  bales,  packages,  bun- 
dles, or  not  so  inclosed  or  included;  and  such  ship- 
per, consignor,  agent,  or  person  shall  duly  attach 
and  cancel,  as  is  in  this  Act  provided,  to  each  of 
said  bills  of  lading,  manifests,  or  other  memoran- 
dum, a  stamp  of  the  value  of  1  cent:  Proi'ided,  That 
a  consignment  of  newspapers  to  any  one  point  or  to 
different  points  by  the  same  train  or  conveyance 


34  THE  WAR  REVEINUE  LAW. 

when  inclosed  in  one  general  bundle  at  the  point  of 
shipment  shall  be  considered  as  one  shipment,  and, 
in  lieu  of  a  bill  of  lading  therefor,  the  publisher  of 
such  newspaper  shall  file  on  or  before  the  fifteenth 
day  of  each  month  with  the  collector  of  internal  rev- 
enue for  the  district  in  which  such  newspaper  is 
published  a  report  under  oath  showing  the  number 
of  such  shipments  during  the  preceding  month  to 
which  report  such  publisher  shall  affix  and  cancel 
stamps  equal  in  value  to  1  cent  for  each  shipment 
so  reported :  Provided  further,  That  the  report  herein 
required  shall  not  include  shipments  of  newspapers 
delivered  to  points  within  the  county  in  which  the 
same  are  published.  Any  failure  to  issue  such  bill 
of  lading,  manifest,  or  other  memorandum,  as  herein 
provided,  shall  subject  such  railroad  or  steamboat 
company,  carrier,  express  company,  or  corporation 
or  person  to  a  penalty  of  $50  for  each  offense. 

Telegraph  and  telephone  messages:  It  shall  be 
the  duty  of  every  person,  firm,  or  corporation  own- 
ing or  operating  any  telegraph  or  telephone  line  or 
lines  to  make  within  thirty  days  after  the  expiration 
of  each  month  a  sworn  statement  to  the  collector  of 
internal  revenue  in  each  of  their  respective  districts, 
stating  the  number  of  dispatches,  messages,  or  con- 
versations originated  at  each  of  their  respective  ex- 
changes, toll  stations,  or  offices,  and  transmitted 
thence  over  their  lines  during  the  preceding  month 
for  which  a  charge  of  15  cents  or  more  was  imposed, 
and  for  each  of  such  messages  or  conversations  the 
said  person,  firm  or  corporation  shall  collect  from 


THE  WAR  REVENUE  LAW.  85 

the  person  paying  for  the  message  or  conversation  a 
tax  of  1  cent  in  addition  to  the  regular  charges  for 
the  message  or  conversation,  which  tax  the  said  per- 
son, firm,  or  corporation  shall  in  turn  pay  to  the  said 
collector  of  internal  revenue  of  their  respective  dis- 
tricts :  Provided,  That  only  one  payment  of  said  tax 
shall  be  required,  notwithstanding  the  lines  of  one 
or  more  persons,  firms,  or  corporations  shall  be  used 
for  the  transmission  of  each  of  said  messages  or  con- 
versations: Provided  furtlier,  That  the  messages  or 
dispatches  of  the  officers  and  employees  of  any  tele- 
graph or  telephone  company  concerning  the  affairs 
and  service  of  the  company,  and  like  messages  or 
dispatches  of  the  officials  and  employees  of  railroad 
companies  sent  over  the  wires  on  their  respective 
railroads  shall  be  exempt  from  this  requirement: 
And  provided  further,  That  messages  of  officers  and 
employees  of  the  Government  on  official  business 
shall  be  exempt  from  the  taxes  herein  imposed  upon 
telegraphic  and  telephonic  messages. 

Bond:  For  indemnifying  any  person  or  persons, 
firm,  or  corporation  who  shall  have  become  bound 
or  engaged  as  surety  for  the  payment  of  any  sum  of 
money,  or  for  the  due  execution  or  performance  of 
the  duties  of  any  office  or  position,  and  to  account  for 
money  received  by  virtue  thereof,  and  all  other 
bonds  of  any  description,  except  such  as  may  be  re- 
quired in  legal  proceedings,  not  otherwise  provided 
for  in  this  schedule,  50  cents. 

Certificate  of  profits,  or  any  certificate  or  memo- 
randum showing  an  interest  in  the  property  or  ac- 


^6  THE  WAR  REVENUE  LAW. 

cumulations  of  any  association,  company,  or  cor- 
poration, and  on  all  transfers  thereof,  on  each  $100 
■of  face  value  or  fraction  thereof,  2  cents. 

Certificate:  Any  certificate  of  damage,  or  other- 
wise, and  all  other  certificates  or  documents  issued 
by  any  port  warden,  marine  surveyor,  or  other  per- 
son acting  as  such,  25  cents. 

Certificate  of  any  description  required  by  law  not 
otherwise  specified  in  this  Act,  10  cents. 

Contract:  Broker's  note,  or  memorandum  of  sale 
of  any  goods  or  merchandise,  stocks,  bonds,  ex- 
change, notes  of  hand,  real  estate,  or  property  of 
any  kind  or  description  issued  by  brokers  or  per- 
sons acting  as  such,  for  each  note  or  memorandum  of 
sale,  not  otherwise  provided  for  in  this  Act,  10  cents. 

Conveyance:  Deed,  instrument,  or  writing, 
whereby  any  lands,  tenements,  or  other  realty  sold 
shall  be  granted,  assigned,  transferred,  or  otherwise 
conveyed  to,  or  vested  in,  the  purchase  or  pur- 
chasers, or  any  other  person  or  persons,  by  his,  her, 
or  their  direction,  when  the  consideration  or  value 
•of  the  interest  or  property  conveyed,  exclusive  of  the 
value  of  any  lien  or  encumbrance  thereon,  exceeds 
$100  and  does  not  exceed  $500,  50  cents;  and  for 
each  additional  $500  or  fractional  part  thereof  in 
excess  of  $500,  50  cents:  Provided,  That  nothing 
contained  in  this  paragraph  shall  be  so  construed  as 
"to  impose  a  tax  upon  any  instrument  or  writing 
given  to  secure  a  debt. 

Entry  of  any  goods,  wares,  or  merchandise  at  any 
•customhouse,  either  for  consumption  or  warehous- 


THE  WAR  REVENUE  LAW.  87 

ing,  not  exceeding  $100  in  value,  25  cents;  exceeding 
$100  and  not  exceeding  $500  in  value,  50  cents;  ex- 
ceeding $500  in  value,  $1. 

Entry  for  the  withdrawal  of  any  goods  or  mer- 
chandise from  customs  bonded  warehouse,  50  cents. 

Insurance:  Each  policy  of  insurance  or  other  in- 
strument, by  whatever  name  the  same  shall  be  called, 
by  which  insurance  shall  be  made  or  renewed  upon 
property  of  any  description  (including  rents  or 
profits),  whether  against  peril  by  sea  or  on  inland 
waters,  or  by  fire  or  lightning,  or  other  peril,  made 
by  any  person,  association,  or  corporation,  upon  the 
amount  of  premium  charged,  one-half  of  1  cent  on 
each  dollar  or  fractional  part  thereof:  Provided, 
That  purely  cooperative  or  mutual  fire  insurance 
companies  or  associations  carried  on  by  the  mem- 
bers thereof  solely  for  the  protectioij  of  their  own 
property  and  not  for  profit  shall  be  exempted  from 
the  tax  herein  provided:  And  provided  further,  That 
policies  of  reinsurance  shall  be  exempt  from  the  tax 
herein  imposed  by  this  paragraph. 

Each  policy  of  insurance,  or  bond  or  obligation  of 
the  nature  of  indemnity  for  loss,  damage,  or  liability 
issued,  or  executed,  or  renewed  by  any  person,  asso- 
ciation, company,  or  corporation,  transacting  the 
business  of  fidelity,  employer's  liability,  plate  glass, 
steam  boiler,  burglary,  elevator,  automatic  sprinkler, 
or  other  branch  of  insurance  (except  life,  personal 
accident,  and  health  insurance,  and  insurance  de- 
scribed and  taxed  or  exempted  in  the  preceding  par- 
agraph and  excepting  also  workmen's  compensa- 


gg  THE  WAR  REVENUE  LAW. 

tion  insurance  carried  on  by  the  members  thereof 
solely  for  their  own  protection  and  not  for  profit), 
and  each  bond  undertaking  or  recognizance,  condi- 
tioned for  the  performance  of  the  duties  of  any  office 
or  position,  or  for  the  doing  or  not  doing  of  anything 
therein  specified,  or  other  obligation  of  the  nature 
of  indemnity,  and  each  contract  or  obligation  guar- 
anteeing the  validity  or  legality  of  bonds  or  other 
obligations  issued  by  any  State,  county,  municipal, 
or  other  public  body  or  organization,  or  guarantee- 
ing titles  to  real  estate  or  mercantile  credits  exe- 
cuted or  guaranteed  by  any  liability,  fidelity,  guar- 
antee, or  surety  company  upon  the  amount  of  pre- 
mium charged,  one-half  of  1  cent  on  each  dollar  or 
fractional  part  thereof:  Provided,  That  policies  of 
reinsurance  shall  be  exempt  from  the  tax  herein  im- 
posed by  this. paragraph. 

Passage  ticket,  for  each  passenger,  sold  in  the 
United  States  for  passage  by  any  vessel  to  a  foreign 
port  or  place,  if  costing  not  exceeding  $30,  $1 ;  cost- 
ing more  than  $30  and  not  exceeding  $G0,  $3;  costing 
more  than  $60,  $5:  Provided,  That  such  passage 
tickets,  costing  $10  or  less,  shall  be  exempt  from 
taxation. 

Power  of  attorney  or  proxy  for  voting  at  any  elec- 
tion for  officers  of  any  incorporated  company  or  as- 
sociation, except  religious,  charitable,  or  literary 
societies,  or  public  cemeteries,  10  cents. 

Power  of  attorney  to  sell  and  convey  real  estate, 
or  to  rent  or  lease  the  same,  to  receive  or  collect 
rent,  to  sell  or  transfer  any  stock,  bonds,  scrip,  or 


THE  WAK  RE3VENUB  LAW.  g^ 

for  the  collection  of  any  dividends  or  interest 
thereon,  or  to  perform  any  and  all  other  acts  not 
hereinbefore  specified,  25  cents:  Provided,  That  no 
stamps  shall  be  required  upon  any  papers  necessary 
to  be  used  for  the  collection  of  claims  from  the 
United  States  for  pensions,  back  pay,  bounty,  or  for 
property  lost  in  the  military  or  naval  service. 

Protest:  Upon  the  protest  of  every  note,  bill  of 
exchange,  acceptance,  check  or  draft,  or  any  marine 
protest,  whether  protested  by  a  notary  public  or  by 
any  other  officer  who  may  be  authorized  by  the  law 
of  any  State  or  States  to  make  such  protest,  25  cents^ 

Every  seat  sold  in  a  palace  or  parlor  car  and 
every  berth  sold  in  a  sleeping  car,  1  cent,  to  be  paid 
by  the  company  selling  the  same. 

Stamp  Taxes. 

Schedule  A  is,  for  the  main  part,  re-enacted  from  the  Act  of 
1898,  ch.  448,  June  13,  amended  as  to  subds.  2,  3,  5,  6,  10  and  13 
by  the  Act  of  1901,  ch.  806,  March  2,  and  repealed  by  Act  of 
April  12,  1902.  A  similar  schedule  was  contained  in  the  Act  of 
June  30,  1864,  ch.  173,  §  99. 

Bonds,  Debentures,  Certificates  of  Stock,  etc. 

The  proviso  may  be  traced  to  the  Act  of  1866,  14  Stat.  134. 

It  is  to  be  observed  that  this  tax  is  on  the  transaction  itself 
between  buyer  and  seller,  and  not  on  the  act  of  brokerage  as 
such,  although  both  the  parties  to  the  transaction  and  the  broker 
(where  there  is  one)  are  liable  to  the  penalty.  The  broker's 
memorandum,  as  between  him  and  his  customer,  is  taxable  under 
another  paragraph,  post,  at  a  flat  rate.  The  tax  under  this  clause 
is  according  to  face  value.  The  only  memorandum  or  bill  re- 
quired here  is  for  transactions  covering  stock  certificates  in 
blank,  but  wherever,  for  any  reason,  there  is  a  memorandum  of 
sale  or  delivery  or  transfer,  it  must  be  stamped. 

"  Debenture  "  is  nowhere  satisfactorily  defined.  Even  in  Eng- 
land, where  it  is  more  common,  it  covers,  generally,  acknowledg- 


90  THE  WAR  REVENUE  LAW. 

ments  of  debt  by  a  corporation  or  a  large  partnership.  (1881) 
British  India,  etc.,  Co.  v.  Com'rs  of  Inland  Rev.,  7  Q.  B.  Div.  165. 

A  narrower  use  of  the  word  in  England  applies  to  a  sort  of 
floating  security. 

For  the  purposes  of  this  Act,  it  may  be  defined  "  a  writing 
acknowledging  a  debt,"  as  in  (1904)  People  ex  rel.  Cohn  v.  Miller, 
180  N.  Y.  16,  under  the  State  franchise  tax  law,  discussing  so- 
called  "  preferred  debenture  shares." 

American  railroads  have  issued  debentures,  especially  where 
large  companies  pledge  their  holdings  of  the  securities  of  smaller 
roads  which  they  own.  Cook,  Law  of  Corporations,  7th  Ed., 
§  776. 

The  N.  Y.  State  tax  on  stock  transfers,  L.  1905,  c.  241,  con- 
stitutional.    (1907)  Hatch  v.  Reardon,  204  U.  S.  152. 

A  broker  was  indicted  for  omitting  the  required  stamps  from 
a  memo,  of  sale  of  R.  R.  shares.  His  demurrer,  on  the  ground 
that  the  Act  of  1898  was  unconstitutional,  was  overruled.  Found 
guilty  on  trial.  Judgment  went  to  the  Supreme  Court  on  writ 
of  error  and  was  affirmed.  (1904)  Thomas  v.  U.  S.,  192  U.  S. 
363,  affg.  (1902)  U.  S.  v.  Thomas,  115  Fed.  Rep.  207,  where  an 
elaborate  opinion  closes  with  the  words,  "  The  defendant's  con- 
tention, seemingly,  is  that,  in  the  procession  of  constitutional 
interpretation,  some  reason  has  just  now  appeared  that  should 
awaken  the  courts  to  a  fundamental  error,  of  which  all  men  for 
a  century  have  been  profundly  unconscious.  But  such  attention 
as  is  due  the  inquiry  from  the  trial  court  confirms  the  wisdom 
of  the  past,  and  the  power  of  Congress  to  lay  the  tax." 

All  stock  issues  pay  5c  on  $100  face. 

All  bond,  etc.,  issues  pay  5c  on  $100  face. 

All  sales,  etc.,  i.  e.,  all  changes  of  possession  or  ownership, 
pay  2c  on  $100  face.     The  stamp  on  sale,  etc.,  goes 

On  the  books,  if  there  is  no  other  evidence  of  transfer; 

On  the  certificate,  if  transferee  is  named; 

On  a  separate  bill  or  memo.,  if  transferred  in  blank. 

Though  a  mining  company  has  millions  of  shares  at  a  dollar 
par  value  and  selling  for  almost  nothing,  every  certificate  orig- 
inally issued  must  be  stamped.  Treas.  Decis.  June  23,  1898 
(19562). 

It  was  first  ruled  under  the  Act  of  1898  that  "  puts,"  "  calls  " 
and  spreads  were  all  taxable.  T.  D.  20093,  Sept.  24,  1898.  But 
on  an  opinion  of  the  Att.  Gen.  (April  27,  1899),  as  to  puts  and 


THE  WAR  REVENUE  LAW.  91 

calls,  the  commissioner  modified  his  ruling  and  taxed  only  calls 
and  spreads.  T.  D.  21151,  May  12,  1899.  The  matter  was  taken 
to  the  conrts  where  it  was  held  that  a  "  call "  was  an  agreement 
to  sell,  and  must  be  stamped,  but  not  so  a  "  put."  (1900)  White 
V.  Treat,  181  U.  S.  264,  reversing  100  Fed.  Rep.  290.  The  court 
said  that  ambiguities  should  be  resolved  in  favor  of  the  taxpayer. 

Where  an  agent  on  commission  at  a  branch  bucket-shop  prop- 
erly stamped  a  sale  memorandum,  and  the  operation  was  a  single 
transaction,  the  principal  did  not  violate  the  law  (Act  March  2, 
1901,  31  Stat.  943),  by  omitting  to  stamp  another  memorandum. 
(1902)  U.  S.  V.  Clawson,  119  Fed.  Rep.  994. 

But  this  case  is  distinguished  in  (1904)  Municipal  Tel.  &  Stock 
Co.  V.  Ward,  133  Fed.  Rep.  70,  holding  that  the  plaintiff  could 
not  recover  taxes  paid  under  protest  on  a  series  of  transactions 
through  "  correspondents  "  who,  however,  were  not  really  agents. 

Where  a  broker  transacted  business  through  branch  agencies, 
only  one  memorandum  should  be  stamped.  (1912)  Metropolitan 
Exchange  v.  Gill,  199  Fed.  Rep.  545. 

But  where  one  bucket  shop  co-operates  with  another  in  trans- 
actions, there  must  be  two  stamped  memoranda.  (1907)  Eld- 
redge  v.  Ward,  155  Fed.  Rep.  253,  174  Fed.  Rep.  402. 

Where  each  separate  agreement  for  future  delivery  was  prop- 
erly stamped,  no  tax  is  imposed  on  the  settlements.  (1900) 
Fleshman  v.  McClain,  105  Fed.  Rep.  610;  106  Fed.  Rep.  880.  In 
this  case  it  was  also  held  that  the  government  must  collect  a 
stamp  tax  by  selling  stamps,  and  cannot  sue  for  the  face  value 
of  omitted  stamps.  A  broker  who,  under  threat  of  suit,  paid  the 
collector  a  sum  in  lieu  of  stamps,  was  entitled  to  recover. 
Sales  of  Products  on  Exchange. 

Cf.  Act  of  July  1,  1862,  §  110,  Schedule  B;  June  30,  1864,  §  170, 
Schedule  B;  June  13,  1898,  Schedule  A,  amended  March  2,  1901. 

The  earlier  Acts  required  a  stamp  on  every  agreement  any- 
where, but  the  Acts  of  1898  and  1914  apply  only  to  exchange  or 
board  transactions. 

This  tax  was  intended  to  apply  to  "  paper  transactions  made 
on  the  exchange "  and  not  to  sales  of  "  merchandise  actually 
delivered  contemporaneously  with  the  sale." 

As  it  originally  stood  in  1898  it  was  held  constitutional.  (1898) 
Nicol  V.  Ames,  89  Fed.  Rep.  144  (as  to  Chicago  stock  yards), 
affirmed   (1899)  Nicol  v.  Ames,  173  U.  S.  509,  where  the  opinion 


92  THE  WAR  REVENUE  LAW. 

said:  "A  tax  upon  the  privilege  of  selling  property  at  the  ex- 
change and  of  thus  using  the  facilities  there  offered  in  accom- 
plishing the  sale,  differs  radically  from  a  tax  upon  every~ 
sale  made  in  any  place.  The  latter  tax  is  really  and  practically 
upon  property." 

It  was  held  to  be  a  tax,  not  on  sales  for  present  delivery,  but 
on  the  exchange  privilege.  To  make  this  more  clear,  the  Act  of 
1898  was  amended  by  March  2,  1901,  adding  the  second  proviso. 
But  when  the  Act  of  1914  passed  the  House,  this  paragraph  had 
been  merely  lifted  from  the  earlier  Act  of  1898;  and  the  Senate, 
in  an  interesting  seminar  on  law  and  language,  made  it  clear 
that  the  purpose  was  to  tax  "  paper  transactions  which  might 
involve  future  delivery,  where  it  was  not  likely  there  would  be 
actual  delivery,"  "  exchange  transactions  pure  and  simple,"  "  a 
bucket  shop  tax."  So  an  improved  form  of  the  1901  proviso  was 
added.     (Cong.  Rec.  Oct.  16,  1914,  p.  18385.) 

The  tax  is  determined  by  value.  It  is  upon  the  transaction 
itself,  as  between  parties,  and,  though  on  the  exchange  privilege, 
is  not  on  the  act  of  brokerage  as  such.  The  Act  requires  a  bill  or 
memo,  as  between  buyer  and  seller,  and  both  they  and  the  broker 
are  liable  to  the  penalty.  If  there  is  a  broker's  note  also,  as 
between  broker  and  customer,  it  pays  a  flat  rate  under  a  later 
paragraph  of  Schedule  A. 

Some  so-called  exchanges  or  boards  are  little  more  than  bu- 
reaus of  information.  The  actual  transactions  take  place  in  pri- 
vate offices.  "At"  *  *  *  a  "similar  place"  will  doubtless 
call  for  construction  in  attempted  application  to  special  in- 
stances. The  object  is,  avowedly,  to  get  at  "  gambling  " — not  at 
"purchase  propositions"  as  such,  but  at  "bucket  shopping,"  in- 
cluding the  "  hedging  or  insurance  proposition." 

(Bank  checks,  drafts,  certificates  of  deposit,  orders  for  pay- 
ment, bills  of  exchange,  money  orders  and  letters  of  credit,  were 
taxed  by  the  Act  of  1898,  Schedule  A,  but  are  omitted  from  the 
present  Act.) 

Promissory  Notes. 

This  re-enacts  only  part  of  one  of  the  paragraphs  of  Schedule- 
A  of  the  Act  of  1898,  ch.  448,  June  13.     A  similar  tax  is  found 
in  the  Act  of  1864,  ch.  174,  June  30,  §  170,  Schedule  B,  and  Act. 
of  1862,  ch.  119,  July  1,  §  110,  Schedule  B. 


THE  WAR  REVENUE  LAW.  93 

A  paper  signed  by  several,  each  promising  to  pay  a  sum  indi- 
■cated,  is  taxable  on  the  total  amount  as  a  note.  (1867)  Ballard 
V.  Burnside,  49  Barb.  102. 

A  receipt  for  money  loaned,  importing  an  obligation  to  repay, 
must  be  stamped.     (1870)   Hoops  v.  Atkins,  41  Ga.  109. 

The  use  of  a  receipt  where  a  note  should  be  used  was  ruled 
to  show  intent  to  evade  the  tax.     T.  D.  20985,  April  8,  1899. 

A  due-bill  taxable.     (1866)  Jacquin  v.  Warren,  90  111.  459. 

An  unsigned  admission  of  balance  due  on  accounting  is  not 
a  taxable  note.  (1869)  Jones  v.  Jones,  38  Cal.  584;  (1813)  Wel- 
lard  v.  Moss,  1  Bing.  134. 

A  promissory  note  under  seal,  i.  e.,  a  judgment  note,  or  bill 
obligatory,  is  a  note,  not  a  bond.    T.  D.  21815,  Dec.  4,  1899. 

In  1898  the  commissioner  directed  the  collector  at  New  York 
to  advise  the  clearing  house  that  members  must  discontinue  a 
method  of  lending  money  against  bank  checks,  with  collateral; 
that  such  checks  were  acknowledgments  of  debt  used  in  place 
of  notes,  and  taxable  as  such.     T.  D.  20463,  Dec.  27,  1898. 

An  indorsement  of  a  note  need  not  be  stamped.  (1840)  Rich- 
ards V.  Frankum,  9  Carrington  &  P.  221;  (1871)  Pugh  v.  Mc- 
C!ormick,  14  Wall.  361,  374. 

A  simple  I.  O.  U.,  without  terms  as  to  payment,  not  taxable. 
(1795)  Fisher  v.  Leslie,  1  Esp.  426;  (1909)  Chitty  on  Contracts, 
15  Ed.  p.  137. 

An  unstamped  instrument  may  be  the  subject  of  forgery. 
(1871)  State  v.  Mott,  16  Minn.  472;  (1868)  Cross  v.  Peo.,  47  111. 
152;  (1872)  State  v.  Hill,  30  Wis.  416;  (1883)  Laird  t.  State,  61 
Md.  309;  (1899)  Thomas  v.  State,  40  Tex.  Crim.  App.  46,  L.  R. 
A.  454,  note;  (1873)  Miller  v.  Peo.,  52  N.  Y.  304. 


Express  and  Freight;  Domestic  Bill  of  Lading. 

This  is  taken  with  slight  change  from  the  Act  of  1898,  c.  448, 
30  Stat.  448,  Schedule  A.  Express  companies  were  taxed  by  the 
Act  of  1862  and  were  expressly  exempted  by  the  Act  of  1865, 
<;.  78. 

Under  the  Act  of  1898,  it  was  not  specifically  provided  who 
should  pay  for  or  attach  the  stamp;  and  it  was  held  that  the 
carrier  was  not  precluded  from  requiring  the  shipper  to  pay  the 
tax.     (1900)   American  Express  v.  Michigan,  177  U.  S.  404,  re- 


94  THE  WAR  REVENUE  LAW. 

versing,  77  N.  W.  317.  (1898)  Crawford  v.  Hubbell,  89  Fed.  Rep. 
961;    (1900)   177  U.  S.  419. 

The  present  Act  specifically  requires  the  shipper  to  attach  and 
cancel  the  stamp. 

The  penalty  upon  the  carrier  remains  the  same,  and  is  for 
not  issuing  the  bill  of  lading  in  every  case  where  the  transpor- 
tation charge  exceeds  five  cents. 

The  Georgia  State  Railroad  Commission  ordered  an  express 
company  to  supply  the  required  stamps.  The  company  procured 
an  injunction  which  the  Circuit  Court  of  Appeals  vacated,  order- 
ing a  dismissal.  The  Supreme  Court  aflirmed,  on  the  ground 
that  a  new  Act  of  Congress  had,  pending  the  litigation,  repealed 
the  tax.  (1899)  Dinsmore  v.  Southern  Express  Co.,  92  Fed. 
Rep.  714;    (1900)  102  Fed.  Rep.  794;    (1901)   183  U.  S.  115. 

A  check  for  special  delivery  baggage  from  an  address  in  one 
city  to  an  address  in  another,  such  as  used  by  transfer  com- 
panies, is  not  taxable.    T.  D.  13,  Jany.  9,  1900. 

A  check  for  a  bicycle  going  as  baggage  is  not  taxable.  T.  D. 
62,  March  8,  1900. 

A  traveler's  baggage,  even  excess  weight,  is  not  express  nor 
freight,  and  a  receipt  or  check  for  it  does  not  require  a  stamp. 
Op.  Atty.-Gen.  XXII,  246. 

This  paragraph  does  not  expressly  exempt  shipments  for  the 
government.  Cf.  Telegraph  and  telephone  service,  post.  Un- 
der the  Act  of  1898  it  was  ruled  that  express  receipt  for  ship- 
ment under  government  contract  must  be  stamped.  Op.  Atty.- 
Gen.  XXII,  320. 

But  not  where  shipment  is  for  a  railroad  company  over  its 
own  lines.     Op.  Atty.-Gen.  XXII,  252. 

Shipments  by  rail  to  Canada  and  Mexico  are  included.  24 
Atty.-Gen,  Op.  44. 

Under  the  Act  of  1898,  "  duplicate  '•  bill  of  lading,  etc.,  did  not 
include  a  mere  copy  used  as  a  receipt  or  for  filing  and  not  really 
an  original.  (1904)  Wright  v.  Michigan  Cent.  R.  C,  130  Fed. 
Rep.  843.  Cf.  (1904)  Simpson  v.  Treat,  126  Fed.  Rep.  1003  (copy 
of  charter  party). 

The  change  in  the  paragraph  as  to  newspapers  was  primarily 
a  concession  to  the  growing  use  of  interurban  trolleys  by  the 
increasing  number  of  afternoon  dailies,  but  the  new  plan  expe- 
dites all  deliveries  by  shipment. 


THE  WAR  REVENUE  LAW.  95 

"  Carrier  "  and  "  person  whose  occupation  is  to  act  as  such," 
are  wide  terms.  Here  as  elsewhere  the  distinction  will  often 
turn  on  "  occupation."  A  rural  doctor,  toting  a  bundle,  is  not 
a  carrier.  See  (1906)  City  of  Topeka  v.  Jones,  74  Kan.  164; 
(1905)  South.  Exp.  Co.  v.  Rose  Co.,  124  Ga.  581,  5  L.  R.  A.  619. 

The  present  Act  has  eliminated  the  former  exclusion  of  un- 
stamped bills  of  lading  from  evidence.  This  change  accords 
with  that  under  §§  6,  12  and  13,  ante. 

(A  stamp  tax  imposed  on  foreign  bills  of  lading  by  the  Act  of 
1898  was  held  unconstitutional  as  taxing  exports.  [1901]  Fair- 
bank  V.  U.  S.,  181  U.  S.  283;  [1903]  N.  Y.  &  Cuba  Mail  v.  U.  S., 
125  Fed.  Rep.  320,  reversed  on  another  point,  200  U.  S.  488. 

The  Act  of  June  27,  1902,  c.  1160,  provided  for  the  refund  of 
taxes  illegally  collected  on  export  bills  of  lading  [as  also  on 
certain  legacies] ;  and  c:  408  of  1912  fixed  a  limit  of  time  for 
filing  claims.  Regulations  as  to  procedure  are  in  Treas.  Circu- 
lars No.  627,  July  3,  1902;  No.  628,  July  8,  1902.) 

Telegraph  and  Telephone. 

Under  the  Act  of  1898,  c.  448,  30  Stat.  448,  telephone  and  tele- 
graph messages  were  taxed  under  separate  paragraphs.  Tele- 
grams had  been  taxed  by  the  Act  of  1862,  c.  119,  July  1,  §  110, 
Sch.  B.     The  telephone  tax  was  new  in  1898. 

As  to  telegrams  the  Act  of  1898,  §  18,  forbade  the  transmis- 
sion of  an  unstamped  message,  but  did  not  expressly  require  the 
company  to  pay  the  tax.  It  was  generally  assumed,  and  later 
held,  that  the  sender  must  stamp  the  message,  as  the  "  maker 
or  signer"  under  the  general  provision  (§§  5,  6).  The  com- 
panies assumed  to  cancel  uncancelled  stamps  and  to  be  thereto 
authorized  by  the  sender. 

It  is  the  duty  of  the  sender  (maker  or  singer)  to  stamp  the 
message  (buy,  affix  and  cancel),  and  the  company  is  separately 
forbidden  to  forward  it  unstamped.  The  penalty  of  $100  upon 
the  sender  is  to  secure  payment.  The  penalty  of  $10  upon  the 
company  is  to  insure  attention  and  service  in  the  enforcement 
of  the  law.  (1899)  Kirk  v.  Western  Union  T.  Co.,  90  Fed.  Rep. 
809.    Followed  by  (1900)  Gray  v.  West.  U.  T.,  85    Mo.  App.  123. 

This  is  now  changed.  The  penalty  on  the  company  is  under 
the  general  provision  of  section  23,  post.  "  The  person  paying  " 
covers  the  recipient  of  a  "  collect "  message. 


96  THE  WAR  REVENUE  LAW. 

In  1898  the  telephone  company  was  required  to  pay  the  tax, 
and  the  present  specific  reference  to  the  origin  of  messages 
and  the  person  who  pays  were  absent. 

Where  a  subscriber's  contract  was  $90  for  600  local  calls,  this 
was  equivalent  to  a  message  rate  of  15  cents,  and  the  company 
was  taxable.     (1904)  N.  Y.  Telephone  v.  Treat,  130  Fed.  Rep.  340. 

The  chief  difficulties,  and  they  will  be  substantial,  in  applying 
this  provision,  will  be  in  determining  whether  the  message  rate 
is  15  cents  (under  existing  contracts  with  regular  subscribers), 
and  in  devising  by  the  comany  of  a  satisfactory  method  of  col- 
lecting the  tax.  The  company  must  pay,  and  it  must  collect 
as  best  it  can.  This  will  be  easy  at  pay  stations  having  an 
operator,  but  the  prepayment  slot  devices  offer  a  problem.  The 
company  will  perhaps  pay  this  latter  tax  rather  than  stop  the 
prepayment  service.  High  rate  calls  are  rare  at  such  stations. 
Some  of  the  other  difficulties  are  chiefly  matters  of  records  and 
accounting.  It  would  appear  that  Congress  intended  the  com- 
panies to  bear  the  burden. 

The  company  can  hardly  sue  for  the  pennies,  and  it  may 
not  be  permitted  by  State  boards  to  "  cut  off  the  gas."  The 
government  will  hardly  use  its  legal  machinery  to  aid  the  cam- 
panies. 

The  chairman  of  the  Senate  Finance  Committee  said,  "  These 
taxes  are  not  paid  by  the  telephone  companies.  They  are  paid 
by  the  senders.  Most  of  the  telephone  messages  will  escape 
taxation  altogether  " — as  costing  less  than  15  cents.  Cong.  Rec. 
p.  18379. 

"  The  person  paying  "  covers  "  reversed  charges,"  as  well  as 
the  use  of  a  subscriber's  telephone  by  another  person. 


Indemnity  Bonds  and  Other  Bonds. 

This  is  a  restoration  of  the  language  of  the  Act  of  1898.  In 
the  amendatory  Act  of  March  2,  1901,  to  "reduce  taxation,"  the 
latter  part,  "  all  other  bonds,"  etc.,  was  carelessly  dropped  in  a 
way  to  carry  the  exception.  In  that  form  it  was  held  to  apply  to 
a  surety  indemnity  but  not  to  an  administrator's  bond.  (1902) 
McNally  v.  Field,  119  Fed.  Rep.  445. 

Similar  taxes  were  imposed  by  the  Act  of  1862,  July  1,  §  110, 
Sch.  B.,  and  1864,  June  30,  §  170,  Sch.  B. 


THE  WAR  REVENUE  LAW.  07 

When  the  Act  of  1898  went  Into  effect  it  was  at  first  ruled 
that  the  "  legal  proceedings  "  referred  to  in  Ihe  exception  were 
only  such  as  attachment,  injunction,  appeal,  etc.;  but,  on  an 
opinion  from  the  Attorney-General,  bonds  of  executors,  adminis- 
trators and  guardians  (all  persons  under  judicial  control)  were 
ruled  not  taxable.  Report  of  Commissioner,  1898,  p.  113,  and 
T.  D.  20756,  March  1,  1899. 

Where  an  employer  is  indemnified  but  the  employee  signs  no 
bond,  the  surety  document  is  really  a  fidelity  policy,  and  there 
is  no  tax  under  this  clause.  When  both  the  employee  and  the 
surety  sign,  the  employee  (principal)  pays  the  bond  tax,  and  the 
surety  adds  the  percentage  insurance  tax.  T.  D.  15,  Jany.  11, 
1900,  being  a  letter  to  the  American  Surety  Co. 

Congress  has  no  power  to  tax  the  instrumentalities  of  a  State, 
e.  g.,  the  bond  of  an  administrator,  which  is  an  indispensable 
part  of  the  State's  judicial  system.  (1902)  McNally  v.  Field, 
119  Fed.  Rep.  445. 

Sheriff's  bond  not  taxable.     (1869)  State  v.  Garton,  32  Ind.  1. 

Where  a  bond  is  required  by  a  State  law  from  an  applicant 
for  a  saloon  license,  it  is  one  of  the  exempted  instrumentalities 
of  government.  (1902)  Ambrosini  v.  U.  S.,  187  U.  S.  1;  (1900) 
U.  S.  V.  Owens,  100  Fed.  Rep.  70. 

So,  also,  of  a  bond  required  of  a  notary  public.  (1900)  War- 
wick V.  Bettman,  102  Fed.  Rep.  127;  108  Id.  46.  In  this  matter 
the  Attorney-General  of  Texas  tried  to  argue  constitutionality 
with  the  Department,  but  received  a  flat  ruling  that  all  such 
bonds  of  State  and  local  officers  would  continue  to  be  taxed. 
T.  D.,  20510,  Jany.  10,  1899.  A  few  days  later  this  ruling  was 
cited  to  the  Governor  of  Ohio.  T.  D.  20547,  Jany.  13,  1899.  An 
Ohio  notary  tested  the  matter  in  this  case.  The  States  still 
have  "  rights." 


Certificate  of  Profit  or  Interest. 

Cf.  Act  of  1898,  c.  448,  June  13,  Sch.  A;  Act  of  1864,  c.  173, 
June  30,  §  170,  Sch.  B;  Act  of  1862,  c.  119,  July  1,  §  110,  Sch.  B. 

This  appears  to  be  a  catch-net  provision,  of  rare  application, 
to  cover  such  accumulated  profits  as  have  sometimes  been  di- 
vided by  new  stock  issues. 


98  THE  WAR  REVENUE  LAW. 

Marine  Certificates. 

Cf.  Act  of  1898,  c.  448,  June  13,  Sch.  A;  Act  of  1864,  c.  173, 
June  30,  Sch.  B;  Act  of  1862,  c.  119,  July  1,  Sch.  B. 

On  the  original  certificate  of  damage,  but  not  on  copies.  T.  D. 
19706,  July  18,  1898.  And  see  T.  D.  20387,  Nov.  26,  1898,  as  to 
certificates  of  local  inspection  of  steamers.  Official  copies  and 
copies  required  by  law  to  be  furnished  to  owners  are  exempt. 
Likewise  the  collector's  endorsement  on  registers,  enrollments, 
etc.,  of  change  of  masters  is  exempt  as  a  government  instru- 
mentality. 

Other  Certificates  Kequired  by  Law. 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B; 
July  1,  1862,  §  110,  Sch.  B. 

Earlier  Acts  expressly  taxed  writs  and  other  papers  used  in 
legal  proceedings.  The  question  of  unwarranted  interference 
with  State  processes  came  only  gradually  to  be  discussed.  The 
elimination  of  nearly  all  such  taxes  in  1867  left  a  few  traces 
of  the  earlier  language  in  the  statutes.  Many  decisions  and 
rulings  are  of  little  value  now,  as  both  courts  and  Congress 
have  increasingly  recognized  the  exemption  of  State  and  local 
governmental  instrumentalities. 

A  notarial  certificate  on  a  deposition  does  not  require  a  stamp. 
T.  D.  122,  May  11,  1900.  So  held  under  the  Act  of  1864,  June  30. 
c.  173,  13  Stat.  223,  299;  (1866)  Prather  v.  Pritchard,  26  Ind. 
65;  (1864)  Cardell  v.  Bridge,  9  Allen,  355.  And  under  the  Act 
of  1898.     (1900)  Stirneman  v.  Smith,  100  Fed.  Rep.  600. 

But  not  so  where  the  notarial  act  is  in  no  sense  judicial.  Nor 
does  a  stamp  tax  on  an  ordinary  notarial  certificate  unduly 
burden  an  instrument  of  State  government;  as  the  notary  him- 
self is  not  taxed.  (This  was  a  Federal  case.)  (1904)  Sackett 
V.  McCaffrey,  131  Fed.  Rep.  219  (acknowledgment  of  a  declara- 
tion of  homestead). 

(1902)  Noble  v.  Citizens'  Bk.,  63  Neb.  847,  a  sheriff's  certificate 
of  appraisal  of  realty  for  a  judicial  sale — not  taxable. 

Government  instruments,  papers,  certificates,  disbursing 
checks,  etc.,  not  taxable;  but  certificates  made  for  private  use 
must  be  stamped  when  issued  and  at  the  cost  of  the  appellant 
Op.  Atty.  Gen.  XXII,  134. 


THE  WAR  REVENUE  LAW.  99i 

Certificates  issued  by  a  State  officer  in  tlie  interest  of  the 
State  are  exempt.  Certificates  required  by  law,  issued  at  the  re- 
quest, and  solely  for  the  use,  of  private  persons,  are  taxable.  A, 
teacher's  certificate  is  exempt.  See  §  15,  proviso.  T.  D.  19883, 
Aug.  10,  1898. 

(Charter  Parties  were  taxed  by  the  Act  of  1898,  c.  448,  June  13, 
Sch.  A,  but  are  omitted  from  the  present  law.  It  was  held  that 
where  a  charter  party  was  executed  and  left  abroad,  a  copy 
brought  here  for  necessary  use  was  taxable.  [1904]  Simpsbn  v.. 
Treat.  126  Fed.  Rep.  1003.) 

Broker's  Note. 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B; 
July  1,  1862.  §  110,  Sch.  B. 

Mala  granimatica  non  vitiat  chartam. 

The  paragraph  does  not  mean  that  "  every  memorandum  of 
sale  of  any  goods,"  etc.,  must  be  stamped.  It  is  the  broker's 
note,  sometimes  called  memorandum  of  sale,  which  is  taxed. 
The  purpose  is  to  tax  the  act  of  brokerage,  not  the  transactioa 
between  parties.    Cf.  ante,  as  to  sales  on  exchange. 

A  "  contract  note  "  under  the  British  Act  means  the  note  sent 
by  a  broker  or  agent  to  his  principal  (except  where  such  prin- 
cipal being  a  member  of  a  Stock  Exchange  in  the  United  King- 
dom, is  acting  as  a  broker  or  agent  for  a  principal)  advising  him 
of  the  sale  or  purchase  of  any  stock  or  marketable  security. 
A  broker  loses  his  right  to  commissions  by  failing  to  send  a 
note.  Stamp  Act,  1891,  54  and  55  Vict.  c.  39.  §§  52,  53;  Chitty 
on  Contracts,  loth  Ed.  1909.  c.  VI. 

There  is  nothing  in  the  present  Act  which  requires  a  broker's 
note  to  be  issued,  but  something  of  the  sort  is  practically  neces- 
sary in  all  ordinary  stock,  etc.,  transactions.  See  T.  D.  191,  July 
31,  1900.  Cf.  (1900)  Fleshman  v.  McClain,  105  Fed.  Rep.  610; 
s.  c.  106  id.  880;  and  3  Treas.  Dec.  24. 

It  would  appear  that,  while  the  ordinary  contract  to  sell  realty 
is  not  covered  by  the  last  or  the  present  Act,  such  an  agree- 
ment, negotiated  and  "  issued  "  by  a  broker  and  recognizing  his 
brokerage  rights,  would  be  taxable  under  this  clause.  Cf.  T.  D. 
116.  May  1,  1900. 

Quaere:  Whether  a  broker  does  not  in  effect  issue  a  broker's. 


100  THE  WAR  REVENUE  LAW. 

note  when  he  sends  his  client  a  report  or  even  a  bill  for  com- 
missions? 

CoDTeyance. 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B.; 
July  1,  1862,  §  110,  Sch.  B.  Ad  valorem  duties  on  conveyances 
were  first  imposed  in  England  by  48  Geo.  Ill,  c.  148  (1808). 

The  marked  change  in  the  present  Act  is  that  the  tax  is  now 
upon  the  equity  of  redemption  only.  Formerly  it  was  on  "  the 
consideration  or  value,"  without  the  qualification.  This  was  in- 
terpreted to  mean  the  value  of  the  property,  including  any  mort- 
gage liens,  as  the  English  Act  of  1891,  §  57,  expressly  says. 
But  the  Circuit  Court  held  that  a  master's  conveyance  of  a  rail- 
road, subject  to  prior  liens,  required  stamps  only  on  the  equity. 
(1899)  Central  Trust  Co.  v.  C.  H.  V.  &  T.  Ry.,  92  Fed.  Rep.  919. 

The  actual  consideration  determines  the  taxation.  Cf.  (1873) 
Hall  V.  Jordan,  19  Wall.  271;   (1881)  U.  S.  v.  Griswold,  7  Saw.  311. 

And  a  collector  might  take  testimony  if  he  had  reason  to 
question  the  expressed  consideration.  Circular  No.  17,  July  13, 
1864.  The  English  law  enforces,  by  severe  penalties,  the  ex- 
pression of  the  actual  consideration  (Act  of  1891,  54  and  55  Vict. 
c.  39,  §  5) ;  and  some  States  have  similar  requirements.  This 
Act  says  "  consideration  or  value,"  but  does  not  expressly  pro- 
hibit fictitious  values  or  nominal  considerations. 

The  Act  of  1898  also  included  a  tax  on  mortgages.  When  the 
Senate  eliminated  the  mortgage  tax  and  limited  the  deed  tax 
to  the  interest  conveyed  exclusive  of  liens,  it  also  added  the 
precautionary  proviso  to  this  clause. 

In  requiring  a  master's  foreclosure  deed  to  be  stamped  for 
recording,  held  that  the  cost  of  the  stamps  might  be  treated 
as  a  disbursement  against  the  receiver's  funds.  The  opinion 
distinguishes  the  case  of  a  check  drawn  on  funds  in  court. 
(1898)  Farmers'  L.  &  T.  Co.  v.  Council  Bluffs,  etc.,  Co.,  90  Fed. 
Rep.  806. 

A  partition  deed  not  taxable.     T.  D.  50,  Feby.  27,  1900. 

A  conveyance  without  consideration  by  an  executor  or  by  one 
trustee  to  another  trustee  is  not  taxable.  T.  D.  52,  Feby.  28, 
1900;  67,  March  9,  1900. 

Conveyances  executed  and  delivered,  but  not  recorded,  at  the 


THE  WAR  REVENUE  LAW.  IQl 

time  the  Jax  law  goes  into  effect,  are  not  subject  to  taxation 
when  recorded  subsequent  to  that  date.     T.  D.  196,  Aug.  9,  1900. 

The  Commissioner  has  warned  Registers  of  Deeds  not  to  re- 
lax the  application  of  the  law;  not  to  "accommodate"  persons 
who  find  it  inconvenient  to  stamp  instruments;  and  has  sug- 
gested that  a  Register  who  returns  papers  with  instruction  at 
his  own  expense  might  properly  add  a  charge  to  the  recording 
fees.     T.  D.  94,  April  12,  1900.     But  cf.  notes  under  §  13,  ante. 

Some  States  have  held  that  Congress  has  no  more  right  to 
prescribe  rules  for  the  transfer  of  property  than  to  prescribe 
rules  of  evidence. 

An  unstamped  deed  is  valid  to  prove  title  in  a  partition  ac- 
tion. (1871)  Moore  v.  Moore,  47  N.  Y.  467.  And  see  notes  un- 
der §§  12  and  13,  ante.  But  see  (1867)  Barney  v.  Ivins,  22  Iowa, 
163. 

Whether  a  deed  is  adequately  stamped,  depending  merely  on 
the  value  of  the  land,  is  not  a  federal  question  reviewable  in  the 
Supreme  Court.  (1865)  Lewis  v.  Campan,  3  Wall.  106,  18  L. 
Ed.  211.    But  see  (1873)  Hall  v.  Jordan,  supra. 

A  tax  deed  does  not  require  a  stamp.  (1869)  Delorme  v. 
Ferk,  24  Wis.  201. 

And  see  notes,  ante,  under  §  15  as  to  the  taxation  of  govern- 
mental instrumentalities. 

A  deed  of  release  whereby  a  partnership  receiver  turns  back 
property  to  the  partners  under  a  decree  closing  the  administra- 
tion is  not  a  conveyance  requiring  stamps.  (1900)  Mastin  v. 
Mastin,  99  Fed.  Rep.  435. 

Love  and  affection.     (1870)  Mercer  v.  Mercer,  29  Iowa,  557. 

A  mere  declaration  of  trust  in  land  is  not  a  taxable  convey- 
ance.    (1868)   Sime  v.  Howard,  4  Nev.  473. 

A  conveyance  through  a  middleman,  one  of  the  two  transfers 
being  for  a  nominal  consideration,  required  only  one  stamp. 
(1864)  James  v.  Blauvelt,  Fed.  Cas.  7180. 

Even  under  the  early  Acts  which  used  such  words  as  "  utterly 
void"  as  to  the  record  of  improperly  stamped  and  unstamped 
instruments,  the  burden  to  show  fraudulent  intent  was  on  the 
person  seeking  to  set  aside. 

The  old  English  attestation  is  "  Signed,  sealed,  acknowledged 
and  delivered,  being  first  duly  stamped,  in  the  presence  of ." 

(Leases  were  taxed  in  1898,  but  not  under  the  present  Act.) 


102  THE  WAR  REVENUE  LAW. 

Custom  Honse  Entry*  • 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B; 
July  1,  1862,  §  110,  Sch.  B. 

Custom  house  manifests  were  taxed  under  the  Act  of  1898,  but 
not  under  the  Act  of  1914. 

Insurance. 

Cf.  Act  of  June  13,  1898;  Sch.  A;  June  30,  1864,  §  170,  Sch.  B; 
July  1,  1862,  §  110,  Sch.  B. 

The  National  Board  of  Fire  Underwriters  at  a  special  meet- 
ing on  Oct.  29,  1914,  urged  upon  its  members  "  the  Inevitable 
conclusion  that  the  assumption  of  the  stamp  tax  by  companies 
would  be  unwarranted  and  dangerous."  This  is  part  of  a  gen- 
eral protest  against  over-taxation,  but  is  primarily  occasioned 
by  the  failure  of  the  Act  to  recognize  the  large  proportion  of 
policies  issued  (requiring  the  stamps)  and  later  "  returned,  not 
^wanted." 

Insurance  brokers  were  taxed  by  the  Act  of  March  3, 1865,  etc., 
but  they  were  not  included  in  the  special  taxes  of  1898  and  1914. 

In  the  Act  of  1898  there  were  three  separate  paragraphs  (1) 
life,  (2)  marine,  inland  and  fire,  (3)  casualty,  fidelity  and  guar- 
antee. In  the  present  Act  the  first,  life,  is  omitted  and  the  other 
two  are  welded  together,  with  a  new  statement  of  exemptions, 
including  life,  personal  accident,  health  and  certain  purely  co- 
operative insurance.     Re-insurance  is  also  exempted. 

Recognizing  that  the  premiums  charged  on  open  marine  poli- 
cies could  only  be  ascertained  from  the  underwriters'  books, 
the  underwriters  were  required  to  file  bonds  and  make  returns, 
and  the  stamps  were  affixed  to  the  books  and  cancelled.  T.  D. 
19645,  June  30,  1898.  And  a  similar  plan  was  adopted  for  open 
policies  of  inland  and  fire  insurance.  Circular  No.  504,  July 
20,   1898,  T.   D.   19740. 

The  Senate  debate  was  enlivened  by  a  spirited  discussion  of 
the  old  question  of  the  "  mutuality "  of  mutual  companies  as 
compared  with  old  line  companies.  Cong.  Rec.  pp.  18320  et  seq., 
Oct.  15,  1914. 

An  accident  policy  with  quarterly  premiums  should  be 
stamped  as  a  contract  for  one  year.  The  company's  alleged 
intended  plan  of  stamping  each  installment  did  not  satisfy  the 
law.     (1900)  Buckalew  v.  U.  S.,  102  Fed.  Rep.  320. 


THE  WAR  REVENUE  LAW.  103 

Note  that  "  personal  accident "  policies  are  exempt  from  the 
new  tax. 

"Associations." 

"  The  committee  used  that  word  because  some  correspondence 
which  it  had  from  one  or  two  sources  calling  its  attention  to  a 
number  of  aggregations,  so  to  speak,  of  individuals  operating 
sometimes  as  a  sort  of  joint-stock  concern,  sometimes  as  a 
sort  of  partnership,  and  sometimes  as  an  association.  To  desig- 
nate each  of  them  would  be  somewhat  cumbersome,  and  after 
consulting  the  dictionary  we  felt  that  the  word  used  alone 
would  perhaps  cover  all  these  several  different  sources  [sorts?] 
of  aggregations,  mutual  in  their  character."  Cong.  Rec.  Oct.  15, 
1914,  p.  18319. 

"  The  mutual  workmen's  compensation  companies  thought  they 
might  be  embraced  in  this  provision  unless  they  were  expressly 
excepted  from  it;  and,  in  response  to  their  suggestion,  we  put 
in  the  exception."    Cong.  Rec,  p.  18322. 

Note  on  Legislation  as  she  is  made. 

Mr.  S.  The  Senator  is  now  covering  exactly  the  same  ground 
again. 

Mr.  L.  I  suppose  I  have  a  perfect  right  to  do  so. 

Mr.  S.  Oh,  the  Senator  has  an  absolute  right  to  do  so. 

Mr.  L.  Without  having  the  Senator  from undertake  the 

task  of  telling  me  what  I  may  or  may  not  do  in  this  body. 

Mr.  S.  Oh,  the  Senator  can  say  anything  he  pleases.  I  do  not 
care. 

Mr.  L.  Now  that  we  have  cleared  up  that  situation,  with  the 
kind  permission  of  the  Senator  I  will  go  ahead  and  try  to  say 
the  one  or  two  sentences  that  I  started  to  say  when  I  first  rose. 

Mr.  S.  Well,  go  ahead,  and  for  God's  sake,  get  through  with  it. 
(Laughter.)     Etc.,  etc. 

Cong.  Rec,  Oct.  15,  1914,  p.  1834-5,  while  the  insurance  clause 
was  under  debate. 

Passage  Ticket, 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B; 
July  1,  1862.  §  110,  Sch.  B. 

The  paragraph  in  the  Act  of  1898  did  not  have  the  "  sold  in 
the  U.  S.,"  and  the  present  change  was  thought  to   remove  a 


104  THE  WAR  REVENUE  LAW. 

discrimination  in  the  former  Act  in  favor  of  Canadian  agents. 
An  unsuccessful  attempt  was  made  to  classify  tickets  according 
to  steamship  classes,  so  as  certainly  to  make  the  low  rate  apply 
to  all  steerage.  The  Act  of  1898  (in  a  dislocated  proviso  in  the 
warehouse  paragraph)  excepted  traffic  between  the  United  States 
and  British  North  America. 

Quaere  as  to  whether  the  change  in  the  law  may  not  enable 
ship  companies  to  sell  such  tickets  in  Europe  and  avoid  the  tax? 

Members  of  the  diplomatic  corps  are  by  comity  exempted 
from  stamp  taxes  such  as  those  on  checks,  drafts,  passage 
tickets  and  warehouse  receipts.     T.  D.  170,  June  29,  1900. 

Porto  Rico  is  not  a  foreign  country,  and  passage  tickets  from 
United  States  to  Porto  Rico  are  not  taxed.  T.  D.  115,  May  1, 
1900. 

Cf.  post  as  to  all  Insular  Possessions. 

Power  of  Attorney. 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B; 
July  1,  1862,  §  110,  Sch.  B. 

The  authorization  in  an  ordinary  judgment  note  is  a  "  war- 
rant "  of  attorney,  not  a  power,  and  is  not  taxable.  (1901)  Tol- 
man  v.  Treat,  106  Fed.  Rep.  679 ;  affmd.  113  Fed.  Rep.  892. 

Where  a  power  was  executed  in  England,  to  convey  lands 
there  and  in  the  United  States,  the  omission  of  a  stamp  tax  did 
not  affect  the  validity  or  admissibility  in  the  United  States. 
The  penalty  in  England  is  not  avoidance  but  inadmissibility  until 
stamped,  and  the  English  revenue  laws  could  not  prescribe 
American  practice.  (1900)  Linton  v.  Natl.  L.  I.  Co.,  104  Fed.  Rep. 
584,  592. 

Protest. 

Cf.  Act  of  June  13,  1898,  Sch.  A;  June  30,  1864,  §  170,  Sch.  B.- 
July 1,  1862,  §  110,  Sch.  B. 

The  practice  has  been  to  add  the  cost  of  the  stamp  to  the 
ordinary  protest  fees.  If  the  protest  itself  is  warranted  in  law, 
its  necessity  or  propriety  will  carry  the  added  charge  as  a  neces- 
sary incident.  In  any  event  there  will  be,  as  there  ought  to  be, 
much  protesting  against  too  much  protesting. 

(Warehouse  receipts  were  taxed  in  1898,  but  are  now  omitted 
from  the  schedule.) 


THE  WAR  REVENUE  LAW.  105 

Parlor  Car  Seat;   Sleeper  Berth. 

This  tax  was  not  included  in  Schedule  A  of  the  Act  of  June  13, 
1898;  but,  after  an  unsuccessful  attempt  to  tax  the  companies 
on  gross  receipts,  a  separate  section  (§  28)  imposed  practically 
this  same  tax.  In  addition  to  paying  the  stamp,  the  company 
was  to  affix  it.  The  company  will  now  do  both,  or  perhaps 
have  tickets  printed  on  imprinted  stamp  paper. 


106  THE  WAR  REVENUE  LAW. 


SCHEDULE  B. 

Perfumery  and  cosmetics  and  other  similar  arti- 
cles: For  and  upon  every  packet,  box,  bottle,  pot, 
phial,  or  other  inclosure  containing  any  essence,  ex- 
tract, toilet  water,  cosmetic,  vaseline,  petrolatum, 
hair  oil,  pomade,  hair  dressing,  hair  restorative,  hair 
dye,  tooth  wash,  dentifrice,  tooth  paste,  aromatic 
cachous,  or  any  similar  substance  or  article,  by 
whatsoever  name  the  same  heretofore  have  been, 
now  are,  or  may  hereafter  be  called,  known,  or  dis- 
tinguished, used,  or  applied  as  perfumes  or  as  cos- 
metics, and  sold  or  removed  for  consumption  and 
sale  in  the  United  States,  where  such  packet,  box, 
bottle,  pot,  phial,  or  other  inclosure,  with  its  con- 
tents, shall  not  exceed  at  the  retail  price  or  value 
the  sum  of  5  cents,  one-eighth  of  1  cent. 

Where  such  packet,  box,  bottle,  pot,  phial,  or 
other  inclosure,  with  its  contents,  shall  exceed  the 
retail  price  or  value  of  5  cents,  and  shall  not  exceed 
the  retail  price  or  value  of  10  cents,  two-eighths  of 
1  cent. 

Where  such  packet,  box,  bottlej  pot,  phial,  or 
other  inclosure,  with  its  contents,  shall  exceed  the 
retail  price  or  value  of  10  cents  and  shall  not  ex- 
ceed the  retail  price  or  value  of  15  cents,  three- 
eighths  of  1  cent. 

Where  such  packet,  box,  bottle,  pot,  phial,  or  other 
inclosure,  with  its  contents,  shall  exceed  the  retail 
price  or  value  of  15  cents  and  shall  not  exceed  the 


THE  WAR  REVENUE  LAW.  107 

retail  price  or  value  of  25  cents,  five-eighths  of  1 
cent.  And  for  each  additional  25  cents  of  retail 
price  or  value  or  fractional  part  thereof  in  excess 
of  25  cents,  five  eighths  of  1  cent. 

Chewing  gum  or  substitutes  therefor:  For  and 
upon  each  box,  carton,  jar,  or  other  package  con- 
taining chewing  gum  of  not  more  than  $1  of  actual 
retail  value,  4  cents;  if  exceeding  $1  of  retail  value, 
for  each  additional  dollar  or  fractional  part  thereof, 
4  cents;  under  such  regulations  as  the  Commissioner 
of  Internal  Revenue,  with  approval  of  the  Secretary 
of  the  Treasury,  may  prescribe. 

That  all  articles  and  preparations  provided  for  in 
this  schedule  which  are  in  the  hands  of  manufac- 
turers or  of  wholesale  or  retail  dealers  on  and  after 
December  first,  nineteen  hundred  and  fourteen,  shall 
be  subject  to  the  payment  of  the  stamp  taxes  herein 
provided  for,  but  it  shall  be  deemed  a  compliance 
with  this  Act  as  to  such  articles  on  hand  in  the 
hands  of  wholesale  or  retail  dealers  as  aforesaid  who 
are  not  the  manufacturers  thereof  to  affix  the  proper 
adhesive  tax  stamp  at  the  time  the  packet,  box, 
bottle,  pot,  or  phial,  or  other  inclosure  with  its  con- 
tents is  sold  at  retail. 

There  shall  be  an  allowance  of  drawback  on  ar- 
ticles mentioned  in  Schedule  B  of  this  Act  on  which 
any  internal-revenue  tax  shall  have  been  paid,  equal 
in  amount  to  the  stamp  tax  paid  thereon,  and  no 
more,  when  exported,  to  be  paid  by  the  warrant  of 
the  Secretary  of  the  Treasury  on  the  Treasurer  of 
the  United  States,  out  of  any  money  arising  from  in- 


108  THE  WAR  REVENUE  LAW. 

ternal  taxes  not  otherwise  appropriated:  Provided^ 
That  no  allowance  of  drawback  shall  be  made  for 
any  such  articles  exported  prior  to  the  date  this  Act 
becomes  effective.  The  evidence  that  any  such  tax 
has  been  paid  as  aforesaid  shall  be  furnished  to  the 
satisfaction  of  the  Commissioner  of  Internal  Reve- 
nue by  the  person  claiming  the  allowance  of  draw- 
back, and  the  amount  shall  be  ascertained  under 
such  regulations  as  shall  be  prescribed  from  time 
to  time  by  said  commissioner,  with  the  approval  of 
the  Secretary  of  the  Treasury. 

The  original  bill,  as  it  went  from  the  House  to  the  Senate,  re- 
enacted  the  Schedule  B  of  the  Act  of  1898.  Protests  were  more 
persuasive  here  than  in  some  other  matters,  and  the  whole 
class  of  medicinal  and  proprietary  articles  was  cut  out,  leaving 
only  perfumes,  cosmetics  and  chewing  gum. 

Cf.  notes  under  §§  17-22,  inclusive. 

For  former  schedules,  see  Act  of  June  13,  1898,  Sch.  B;  June 
30,  1864,  §  170,  Sch.  C;  July  1,  1862,  §  110,  Sch.  C.  And  cf.  R.  S. 
1878,  §§  3419,  3437. 

The  Greek  word  kosmetikos  from  which  the  English  cosmetic 
is  derived  means  skilled  in  decorating.  The  Collector,  however, 
will  not  be  liberal  in  exempting  things  not  demonstrably  deco- 
rative; for  the  Century  definition  expressly  includes  any  prepa- 
ration which  "helps  or  professes  to  be  able  to  help  to  beautify 
or  improve  the  complexion."  Webster  includes  "  any  external 
application  intended  to  beautify  and  improve  the  complexion,  skin 
or  hair."  There  may  thus  be  a  shadow  land  where,  while  omit- 
ting medicines  generally,  the  Act  will  appear  to  discriminate 
against  dermatotherapy. 

There  will  also  be  some  interesting  refinement  of  discrimi- 
nating differentiation  when  the  revenue  detectives  come  to  apply 
the  definition  of  perfumery  and  perfume,  as  exempli  gratia 
whether  the  substance  emits  a  pleasant  odor  or  a  scent  which 
really  affects  the  organs  of  smell  agreeably. 


THE  WAR  REVENUE  LAW.  109 

The  Department  issued  a  detailed  Circular  No.  16 — Int.  Rev. 
No.  501,  revised,  February  8,  1900  (T.  D.  37),  covering  Schedule  B 
of  the  Act  of  1898. 

Samples  may  be  distributed  under  restrictions  prescribed  by 
the  Commissioner. 

Provision  is  made  for  permitting  sales  by  slot  machines,  the 
sub-packages  being  taken  from  duly  stamped  larger  packages. 
T.  D.  247,  Nov.  17,  1900. 

Where  automatic  atomizers  are  used  for  perfumes  they  will 
have  to  be  filled  from  tax-paid  bottles.  Where  chewing  gum 
is  automatically  delivered,  the  smaller  packages  must  be  taken 
from  larger  tax-paid  packages. 

A  medicated  soap  containing  20  per  cent,  carbolic  acid  is  not 
a  toilet  soap.  (1895)  Park  &  Tilford  v.  U.  S.,  66  Fed.  Rep.  731 
(tariff). 

Distilled  water,  though  advertised  to  preserve  health,  lengthen 
life,  soften,  purify  and  preserve  complexion,  scalp  and  hair,  is 
neither  perfumery  nor  a  cosmetic,  nor  a  similar  article.  T.  D. 
21833,  Dec.  7,  1899. 

The  Act  of  1898  expressly  exempted  natural  spring  waters. 

As  to  the  right  of  a  dealer  to  increase  the  cost  to  the  cus- 
tomer where  the  tax  is  less  than  one  cent.  Cf.  (1866)  Black  v. 
6th  Ave.  R.  R.,  1  Daly,  536. 

Eau  de  Quine  Tonique  is  a  cosmetic.  (1896)  In  re  Mdse.  Im- 
ported by  Holt,  75  Fed.  Rep.  998. 

What  is  a  phial  or  vial?  (1896)  In  re  Grace,  75  Fed.  Rep.  2; 
(1897)   Grace  v.  Collector,  79  Fed.  Rep.  315. 

If  the  article  is  not  stamped  when  sold,  it  is  presumed  never 
to  have  been  stamped.     (1869)   U.  S.  v.  Brown,  Deady,  566. 

Speaking  of  hair  oils  and  things,  see  the  Laws  and  Orders  of 
the  General  Court  of  Massachusetts,  1675: 

"  Whereas,  There  is  manifest  pride  openly  appearing  amongst 
us  ...  by  some  women  wearing  borders  of  hair,  and  their 
cutting,  curling  and  immodest  laying  out  their  hair,  which  prac- 
tice doth  prevail  and  increase,  especially  among  the  younger 
sort,  this  court  doth  declare  against  this  ill  custom  .  .  .  and 
further  do  empower  all  grand  juries  to  present  to  the  county 
court  such  persons  .  .  .  and  the  county  court  are  hereby 
authorized  to  proceed  against  such  delinquents  either  by  ad- 
monition, fine  or  correction." 


110  THE  WAR  REVENUE  LAW. 

Chewing  Gum  or  Substitutes. 

Of  course,  the  boys  of  other  days  know  that  the  tail  of  the 
title  supra  wags  its  head.  No  medicated  masticatory  from  the 
Sapota  zapotilla,  be  it  naseberry,  bully-tree  or  paraffin,  can  pos- 
sibly merit  exemption  as  does  good  old  spruce  gum;  but  it  will 
be  difficult  to  escape  so  large  a  word  as  "  substitutes."  The 
tax  might  be  bearable  if  it  were  really  four  cents  on  the  dollar 
of  value;  but  "retail  value"  will  be  held  to  mean  the  same  as 
"  retail  price  or  value  "  upon  cosmetics. 

"  This  article  seems  to  have  been  a  sort  of  football  in  the 
way  of  taxation.  .  .  .  People  have  been  prone  to  ridicule  it 
as  a  form  of  luxury  not  altogether  to  be  commended.  At  the 
same  time  a  very  strong  showing  is  made  for  the  manufac- 
turers " — having  reference  to  the  66  per  cent,  duty  on  chicle  in 
the  Underwood  tariff.     Senator  Burton,  Cong.  Rec.  18084. 

When  the  wine  tax  was  elaborated  into  §  2,  ante,  the  old  tax  on 
bottled  sparkling  and  other  wines  was  omitted  from  Schedule  B. 

I>rawbacks  on  exportations  and  duties  on  reimportations  are 
covered  by  Act  of  Aug.  5,  1909,  36  Stat.  90.  The  Department 
issued  regulations  in  a  Circular,  No.  39,  Aug.  13,  1909,  as  to 
drawbacks  on  medicinal,  etc.,  preparations.  T.  D.  29952. 
Amended  Regulations,  April  22,  1910,  T.  D.  30559,  and  July  27, 
1910,  T.  D.  30831. 

A  claim  for  a  statutory  drawback  (tobacco)  may  be  sued, 
and  the  Commissioner  may  not  make  an  unreasonable  regula- 
tion to  prevent  recovery.  (1906)  U.  S.  v.  Hyams,  146  Fed.  Rep. 
15;  affirming  139  id.  997. 

A  drawback  (customs),  due  and  refused,  may  be  sued  in  the 
Court  of  Claims.     (1882)  Campbell  v.  U.  S.,  107  U.  S.  407. 


Sec.  23.  That  all  administrative,  special,  or  stamp 
provisions  of  law,  including  the  law  relating  to  the 
assessment  of  taxes,  so  far  as  applicable,  are  hereby 
extended  to  and  made  a  part  of  this  Act,  and  every 
person,  firm,  company,  corporation,  or  association 
liable  to  any  tax  imposed  by  this  Act,  or  for  the  col- 
lection thereof,  shall  keep  such  records  and  render, 


THE  WAR  REVENUE  LAW.  HI 

under  oath,  such  statements  and  returns,  and  shall 
comply  with  such  regulations  as  the  Commissioner 
of  Internal  Revenue,  with  the  approval  of  the  Sec- 
retary of  the  Treasury,  may  from  time  to  time  pre- 
scribe, and  every  such  person,  firm,  company,  corpo- 
ration, or  association  w^ho  evades  or  attempts  to 
evade  any  of  the  taxes  imposed  by  this  Act,  or  shall 
fail  to  truly  account  for  and  pay  all  taxes  collected 
by  them  under  this  Act,  or  any  regulations  issued 
thereunder,  shall  be  subject  to  a  penalty  of  double 
the  amount  of  taxes  evaded  or  attempted  to  be 
evaded  or  unlawfully  withheld,  to  be  assessed  and 
collected  as  other  penalties  incurred  under  internal- 
revenue  laws  are  assessed  and  collected;  and  for  the 
expense  connected  with  the  assessment  and  collec- 
tion of  the  taxes  provided  by  this  Act  there  is 
hereby  appropriated  $200,000,  or  so  much  thereof 
as  may  be  required,  out  of  any  money  in  the  Treas- 
ury not  otherwise  appropriated;  $170,000  to  be 
added  to  and  made  a  part  of  the  appropriations  for 
* '  salaries  and  expenses  of  collection  of  internal  rev- 
nue,  nineteen  hundred  and  fifteen;  and  $30,000  to  the 
appropriation  for  paper  for  internal-revenue  stamps, 
nineteen  hundred  and  fifteen." 


Other  Laws  Made  Applicable.    Collection  of  Taxes. 

"Administrative  .  .  .  provisions "  include  all  existing  ap- 
propriate measures  for  collection  and  enforcement,  including 
the  Government's  right  to  recover  by  suit.  (R.  S.  §§  3213,  3214.) 
(1910)  U.  S.  v.  Chamberlin,  219  U.  S.  250,  269. 

Deputies  canvass  every  district  in  search  of  persons  and  ob- 
jects subject  to  tax.     R.  S.  §  3172,  amend,  by  28  Stat.  509.     The 


112  THE  WAR  REVENUE  LAW. 

appropriate  return  must  be  made,  and  a  default  or  a  false 
return  may  involve  a  summons  for  testimony  and  exhibition  of 
books.  R.  S.  §  3173,  amend,  by  28  Stat.  509.  For  failure  the 
collector  may  apply  to  the  court  for  a  contempt  attachment. 
§  3175.  Refusal  or  neglect  of  return  involves  a  50  per  cent, 
penalty.  False  or  fraudulent  return  involves  a  100  per  cent, 
penalty.  §  3176,  amend,  by  28  Stat.  509.  False  return  or  neg- 
lect of  summons  involves  as  penalty  a  fine  up  to  $1,000  or  prison 
to  one  year,  or  both.  §  3179.  Taxes  may  be  collected  by  dis- 
traint. §§  3187  et  seq.  Suits  for  taxes  and  penalties  must  be 
in  the  name  of  the  United  States.  Judic.  Code,  §  919;  R.  S. 
3213.  As  to  taxes  there  is  no  limitation;  as  to  penalties  the 
limitation  is  five  years,  and  as  to  crime,  three  or  two  years 
according  to  degree.  Judic.  Code,  §  1047,  and  Act  of  July  5, 
1884,  23  Stat.  122. 

R.  S.  §  3173,  as  to  power  of  collector  to  summon  for  examina- 
tion does  not  apply  to  stamp  taxation,  but  only  where  assess- 
ment is  on  returns.  (1900)  In  re  Kinney,  102  Fed.  Rep.  468; 
(1875)  In  re  Becker,  Fed.  Cas.  No.  1208. 

A  collector  may  not  enforce  production  of  corporation  books 
where  the  taxpayer  is  only  a  stockholder.  (1870)  In  re  Chad- 
wick,  1  Lowell,  439. 

Nor  a  man's  private  papers.  (1885)  Boyd  v.  U.  S.,  116  U.  S. 
617   (a  criminal  case). 

Under  18  Stat.  187,  Act  June  22,  1874,  in  a  civil  suit  for  reve- 
nue by  the  government,  books  and  papers  may  be  ordered  pro- 
duced on  pain  of  confessing  the  allegations. 

Under  §  3462  of  R.  S.,  a  search  warrant  may  issue  to  search 
any  premises  where  the  applicant  officer  believes  a  revenue 
fraud  is  being  committed. 

And  evidence  so  obtained  is  not  inadmissible  merely  because 
the  warrant  was  improperly  issued.  24  Atty.-Gen.  Op.  685;  T. 
D.  1609,  in  the  Matter  of  Ripper. 

Under  R.  S.  §  3463,  rewards  are  paid  to  informers.  Depart- 
ment Circular  No.  99,  4th  Revision;  T.  D.  21856,  of  1899,  and 
Regulations  No.  12,  revised.  Extortion  by  informers  penalized. 
R.  S.  §  5484;  Crim.  Code,  §  145.  Officers  accepting  bribes. 
R.  S.  §  3169.  Officers  must  not  aid  violators  in  preparing  state- 
ments.   T.  D.  1607. 


THE  WAR  REVENUE  LAW.  113 

13  Stat.  232,  June  30,  1864,  amended  by  14  Stat.  107,  July  13, 
1866,  gave  the  remedy  of  distraint.  This  was  not  superseded 
by  the  provision  for  equity  suit  in  15  Stat.  125,  167,  July  20,  1868, 
which  gave  a  cumulative  remedy.  (1908)  Blacklock  v.  U.  S., 
208  U.  S.  75,  distinguishing  (1889)  Mansfield  v.  Excelsior  Re- 
fining Co.,  135  U.  S.  326;  both  dealing  with  the  question  as  to 
what  passes  when  the  government  seizes  land  and  sells  it. 
See  R.  S.  §  3187,  §  3213. 

Act  of  March  4,  1913,  c.  166,  amends  R.  S.  §  3186,  unpaid  taxes 
a  lien  on  property. 

As  to  distinction  between  distraint  and  sale  (and  replevin 
by  true  owner),  and  seizure,  condemnation  and  sale,  see  (1907) 
Sheridan  v.  Allen,  153  Fed.  Rep.  568. 

If  the  statute  fails  adequately  to  provide  a  method  of  collec- 
tion, the  omission  may  not  be  cured  by  regulation  under  the 
power  given  by  the  statute  to  the  Commissioner,  to  the  extent 
of  making  monthly  assessments  of  an  annual  tax.  (1901) 
Spreckels  v.  McClain,  109  Fed.  Rep.  76. 

An  interesting  instance  of  collecting  "  back  taxes  "  (which  are 
ordinarily  the  product  of  special  agents'  investigations)  was  the 
plan  adopted  after  the  Equitable  Building  fire  in  New  York  city. 
Tentative  returns  were  accepted,  with  permission  to  amend. 
Report  of  Commissioner,  1913,  p.  14. 

A  return  for  the  assesment  of  a  special  tax  must  be  verified 
by  the  person  himself  and  not  by  an  "  agent."  T.  D.  49,  Feb. 
27,  1900. 

The  government  may  require  the  production  of  books  and 
papers  in  civil  suits  as  well  as  in  criminal.  Act  of  June  22, 
1874,  §  5,  18  Stat.  187. 

As  to  perjury:  §  125  Criminal  Code;  R.  S.  §  5392;  (1908) 
U.  S.  V.  Lamson,  165  Fed.  Rep.  80;  (1891)  U.  S.  v.  Bedgood,  49 
Fed.  Rep.  54;    (1890)  U.  S.  v.  Edwards,  43  Fed.  Rep.  67. 

Oath  before  notary.     (1888)  U.  S.  v.  Hall,  131  U.  S.  50. 

Before  deputy  collector.  (1905)  U.  S.  v.  Hardison,  135  Fed. 
Rep.  419. 

The  steps  requisite  for  the  seizure  and  sale  of  lands  are  set 
forth  in  the  Revised  Statutes.  The  collector  canvasses  for  per- 
sons liable,  §  3172;  return  is  made  or  compelled,  §§  3173-3181; 
the  commissioner  makes  assessment  and  certifies  to  the  col- 
lector, §  3182;  the  collector  gives  ten  days'  notice  to  pay,  §  3184; 


114  THE  WAR  REVENUE  LAW. 

the  tax  becomes  a  lien  after  this,  §  3186;  and  the  collector  may 
then  distrain  and  sell,  §§  3187-3188;  realty  can  be  sold  only 
after  failure  to  find  enough  personalty,  §  3196;  the  party  is  en- 
titled to  notice  of  sale,  §  3197.  (1878)  Brown  v.  Goodwin,  75 
N.  Y.  409. 

All  prerequisites  must  be  strictly  complied  with.  (1882)  U. 
S.  V.  Allen,  14  Fed.  Rep.  263. 

Other  Laws  Made  Applicable.    Penalties. 

See  the  notes  ante  passim. 

The  general  provision  for  the  recovery  of  penalties  is  found  In 
R.  S.  §  3213  et  seq.  The  collector  shall  prosecute  forfeitures, 
shall  sue  in  the  name  of  the  United  States  for  fines  and  penal- 
ties, and  shall  receive  moneys  so  collected  (including  costs). 

A  penalty  may  be  recovered  by  indictment  or  by  a  civil  action 
for  debt.  (1890)  U.  S.  v.  Craft,  43  Fed.  Rep.  374;  (1871)  U.  S. 
V.  Foster,  2  Biss.  453;  (1866)  U.  S.  v.  Morin,  4  Biss.  93;  (1893) 
Lees  v.  U.  S.,  150  U.  S.  476;  (1880)  U.  S.  v.  Chouteau,  102  U.  S. 
603. 

All  persons  participating  in  acts  which  are  misdemeanors  are 
liable  as  principals.     (1893)  U.  S.  v.  Sykes,  58  Fed.  Rep.  1000. 

The  double  tax  penalty  is  from  R.  S.  §  3176,  amended  by  28 
Stat.  509,  and  it  is  also  specially  enacted  as  to  spirits.  §§  3256, 
3296. 

Constitutional.  (1872)  Doll  v.  Evans,  15  Int.  Rev.  Rec.  143, 
144. 

The  penalty  attaches  to  an  untrue  report,  although  it  be  not 
wilfully  false.     (1878)  Germ.  Sav.  Bk.  v.  Archbold,  15  Blatch.  398. 

There  being  no  provision  as  to  Schedule  B  analagous  to  that 
for  post-stamping  under  A,  it  was  ruled  that  voluntary  dis- 
closure, within  the  calendar  month,  of  a  liability  would  avoid 
the  penalty.     T.  D.  239,  Nov.  3,  1900. 

A  discussion  of  forfeitures  is  found  in  (1899)  U.  S.  v.  Two 
Barrels  Whiskey,  C.  C.  A.,  96  Fed.  Rep.  479,  where  a  team  and 
wagon  being  used  without  the  owner's  knowledge  to  facilitate 
a  revenue  fraud,  were  not  forfeited. 

Cf.  (1904)  U.  S.  V.  One  Black  Horse,  129  Fed.  Rep.  167,  where 
a  liveryman's  horse  and  wagon  were  forfeited  for  a  similar  use 
of  them  without  the  owner's  knowledge.     The  court  suggested 


THE  WAR  REVENUE  LAW.  115 

that  the  claimant  should  pursue  the  offender  or  seek  remission 
from  the  government. 

Contracts  made  for  the  purpose  or  with  intention  to  evade 
revenue  laws  are  illegal  at  common  law,  but  only  where  both 
parses  are  parties  to  the  intentional  wrong.  (1826)  Armstrong 
V.  Toler,  11  Wheat.  258;   (1850)  Kreiss  v.  Seligman,  8  Barb.  439. 

All  offenses  against  revenue  laws  are  purely  statutory.  There 
are  no  common-law  offences  against  the  United  States.  (1891) 
U.  S.  V.  Eaton,  144  U.  S.  677,  687. 

The  penalties  imposed  do  not  exclude  personal  liability.  They 
are  imposed  to  induce  payment  of  a  debt  and  are  not  a  substi- 
tute for  payment.  Both  on  general  principles  and  because  the 
Act  of  1898,  c.  448,  extended  R.  S.  §  3213,  to  the  war  tax,  the  gov- 
ernment may  sue  in  a  civil  action  to  recover  a  stamp  tax  under- 
paid on  a  deed.  (1911)  U.  S.  v.  Chamberlin,  219  U.  S.  250;  (1900) 
Fleshman  v.  McClain,  105  Fed.  Rep.  619;  106  Fed.  Rep.  880. 

Revenue  officers  are  liable  in  damages  for  wrongful  seizures, 
but  where  the  court  certifies  probable  cause  the  recovery  Is 
paid  from  the  treasury.  R.  S.  §  989;  (1904)  Haymes  v.  Brown, 
132  Fed.  Rep.  525;    (1905)  Agnew  v.  Haymes,  141  Fed.  Rep.  631. 

Department  rules  and  regulations  cannot  be  relied  upon  as 
affecting  rules  of  evidence  in  court.  (1904)  U.  S.  v.  Cole,  134 
Fed.  Rep.  697. 

The  burden  of  proving  that  a  special  tax  has  been  paid  rests 
on  the  accused.     (1868)  U.  S.  v.  Devlin,  6  Blatchf.  71. 

The  imposition  of  a  fine  or  a  forfeiture  does  not  preclude  the 
superimposition  of  the  other.  (1904)  U.  S.  v.  7  Bbls.  of  Whisky, 
131  Fed.  Rep.  806. 

Stamps  and  marks  on  packages  of  spirits  are  not  in  any 
respect  intended  to  protect  purchasers,  but  only  to  prevent 
fraud  and  obtain  revenue;  and  a  dealer  may  be  penalized  or 
suffer  forfeiture  for  wrong  marking  even  although  the  stamps 
used  are  excessive  for  the  quantity  of  liquor.  Id.  See  R.  S. 
§§  3289,  3323. 

Attempts  have  been  made  to  claim  a  sort  of  estoppel  against 
the  government  by  reason  of  real  or  purported  statements  or 
acts  of  officials.  See  (1904)  Christie-Street  Co.  v.  U.  S.,  12» 
Fed.  Rep.  506. 

"  The  government  would  be  in  a  sorry  plight  if  the  neglects,, 
the  earless  speeches,  and  self-excusing  or  self-serving  statements. 


116  THE  WAR  REVENUE  LAW. 

of  its  ministerial  oflScers  or  agents  could  create  waivers  and 
estoppels  in  suits  by  and  against  the  government."  Phillips, 
D.  J. 

An  absence  of  wrong  intent  will  not  save  butter  with  an  ab- 
normal absorption  of  water  from  being  classed  as  adulterated, 
under  the  Oleomargarine  Act,  May  2,  1902,  c.  784,  32  Stat.  194. 
(1908)  Coopersville  Co.  v.  Lemon,  163  Fed.  Rep.  145. 

A  grocer  who  sold  oleomargarine  was  held  a  taxable  retail 
dealer,  although  he  honestly  supposed  he  was  selling  butter. 
(1899)  Eagle  v.  Nowlin,  94  Fed.  Rep.  646. 

But  see  (1911)  U.  S.  v.  11150  Pounds  of  Butter,  188  Fed.  Rep. 
157;   (1912)  195  Fed.  Rep.  657. 

"  The  law  is  not  so  unreasonable  as  to  attach  culpability,  and 
consequently  to  impose  punishment,  where  there  is  no  intention 
to  evade  its  provisions,  and  the  usual  means  to  comply  with 
them  are  adopted.  All  punitive  legislation  contemplates  some 
relation  between  guilt  and  punishment.  To  inflict  the  latter 
where  the  former  does  not  exist  would  shock  the  sense  of  justice 
of  everyone."  Field,  J.,  in  (1877)  Felton  v.  U.  S.,  96  U.  S.  699, 
703,  action  for  penalty  for  defective  arrangement  of  a  distilling 
plant. 

P\irther,  on  intent,  see  (1873)  U.  S.  v.  Buzzo,  18  Wall.  125 
(stamp  tax;  (1869)  In  re  Quantity  of  Spirits,  3  Ben.  552;  Fed. 
Cas.  11495,  as  to  "  knowingly  and  wilfully." 

No  question  of  intent  is  involved  in  a  prosecution  under  R.  S. 
§  3449.  It  is  a  violation  to  ship  liquors  marked  outside  as 
"  groceries."     (1907)  U.  S.  v.  Liquor  Dealers,  156  Fed.  Rep.  219. 

Nor  under  §  3324  for  failure  to  efface  stamps  and  marks  when 
emptying  a  cask  of  spirits.  (1910)  U.  S.  v.  Gallant,  117  Fed. 
Rep.  281.    Cf.  (1908)  U.  S.  v.  Rogers,  164  Fed.  Rep.  520. 

To  have  in  possession  a  stamp  which  has  accidentally  fallen 
off  a  package  is  an  offense  under  R.  S.  §  3324,  but  not  under  the 
Act  of  March  1,  1879.     (1885)  U.  S.  v.  Spiegel,  116  U.  S.  270. 

A  wrongful  act  by  one  partner  in  the  course  of  business  makes 
all  partners  liable  to  the  penalty.  Under  old  Rev.  Stat.  c.  47. 
(1866)  U.  S.  V.  Thomasson,  4  Biss.  99. 

So  as  to  double  penalty  for  illegal  importations.  (1849)  Com- 
monwealth V.  Sloan,  4  Cush.  52. 

Joint  indictment  of  partners  for  false  returns.     (1866)   U.  S. 


THE  WAR  REVENUE  LAW.  117 

V.  McGinniss,  1  Abb.  U.  S.  120,  cited  also  as  U.  S.  v.  Montjoy, 
3  Int.  Rev.  Rec.  83,  Fed.  Cas.  15,678. 

An  employer  is  responsible  for  wrongful  act  of  employee  only 
when  the  act  is  within  the  scope  of  employment.  (1832)  U.  S. 
V.  Halberstadt,  Gilp.  262,  Fed.  Cas.  15,276. 

Protest,  Beclamation   and   Recovery. 

As  was  said,  or  implied,  in  the  Introductory,  a  tax  collector 
may  not  be  given  discretionary  power.  Despite  the  demand 
in  the  Senate  for  the  repayment  to  certain  States  of  a  cotton 
tax  collected  1862-1868,  where  the  Supreme  Court  split  even  on 
constitutionality  of  the  law,  the  Federal  government  usually 
pays  back  what  it  improperly  takes  from  citizens. 

No  Suit  May  Be  Brought  to  Restrain  a  Tax.    R.  S.  §  3224. 

Recovery  and  refund  are  provided  for.    R.  S.  §§  3220-3231. 

Appeal  must  first  be  made  to  the  commissioner.  R.  S.  §§  3220^ 
3226. 

The  appeal  may  be  lodged  with  the  local  collector.  (1881)  U.. 
S.  V.  Savings  Bk.,  104  U.  S.  728. 

The  limitations  for  claims  is  two  years.  R.  S.  §§  3227,  3228. 
(1883)  James  v.  Hicks,  110  U.  S.  272. 

Congress  has  at  times  extended  the  time  for  reclaims  of  taxes 
wrongly  collected.  E.  g.  under  Act  of  1898.  See  Act  of  July  27, 
1912. 

Claimants  are  not  very  strictly  held  to  the  need  of  formal  pro- 
test. It  may  be  constructive  or  implied.  (1907)  Johnson  v.  Her- 
old,  161  Fed.  Rep.  593.  See  (1913)  Abrast  Realty  Co.  v.  Max- 
well, 206  Fed.  Rep.  333;  (1880)  Real  Est.  Bk.  v.  U.  S.,  16  Ct. 
Cls.  335.  See  also  as  to  protest:  (1908)  Herold  v.  Kahn,  159 
Fed.  Rep.  608;  (1903)  Cheseborough  v.  U.  S.,  192  U.  S.  253; 
(1906)  N.  Y.  &  Cuba  Mail  v.  U.  S.,  200  U.  S.  488. 

Department  Regulations  No.  14,  as  revised,  give  instructions 
as  to  preparing  claims. 

The  commissioner  may  compromise,  with  or  without  suit,  civil 
or  criminal.    R.  S.  §  3229. 

Taxes  voluntarily  paid,  without  protest  or  notice,  cannot  be 
recovered.  (1904)  Cheseborough  v.  U.  S.,  192  U.  S.  253.  In  this 
case  the  claimant  had  bought  stamps  and  used  them  on  a  con- 
veyance and  subsequently  sought  to  attack  the  constitutionality 
of  the  law  (Act  of  June  13,  1898).    Both  in  this  case  and  another- 


118  THE  WAR  REVENUE  LAW. 

(where  the  stamps  were  used  on  the  manifest  of  a  vessel  in 
order  to  obtain  the  clearance  required  by  statute)  the  question 
of  duress  was  unsuccessfully  raised.  (1906)  U.  S.  v.  N.  Y.  and 
Cuba  Mail,  200  U.  S.  488;  125  Fed.  Rep.  320.  And  see  (1884) 
Swift  Co.  V.  U.  S.,  Ill  U.  S.  22  (match  tax  under  Act  of  1870,  ch. 
255,  §  4).  (1903)  Christie  Street  Co.  v.  U.  S.,  126  Fed.  Rep.  991. 
994;  (1901)  Fairbank  v.  U.  S.,  181  U.  S.  283;  (1913)  Merck  v. 
Treat,  202  Fed.  Rep.  133. 

Special  Acts  of  Congress  are  sometimes  passed  to  refund  over- 
paid stamp  taxes,  such  as  stamps  from  private  dies.  Cf.  Act 
of  Feb.  24,  1905. 

Unlawful  exaction  may  subject  a  collector  as  tort  feasor  to 
an  action  of  trespass,  or  for  damages  sounding  in  tort.  See 
(1904)  Christie  v.  U.  S.,  129  Fed.  Rep.  506. 

As  to  recovery  from  the  government  under  R.  S.  §  3226  by  ap- 
pealing to  the  department  for  restitution,  see  (1904)  Christie 
V.  U.  S.,  supra;  (1875)  Cheatham  v.  U.  S.,  92  U.  S.  85;  (1881)  U. 
S.  V.  Sav.  Bank,  104  U.  S.  728;  (1883)  Snyder  v.  Marks,  109  U.  S. 
189;  (1891)  Comr.  Louisville  v.  Buckner,  48  Fed.  Rep.  533;  (1885) 
Kings  Co.  Sav.  Inst.  v.  Blair,  116  U.  S.  200. 

The  remedy  under  R.  S.  §  3226,  must  be  pursued  subject  to 
the  conditions  and  limitations  in  the  statute.  In  the  absence  of 
such  statute  there  would  be  no  such  remedy.  (19031  Christie- 
Street  V.  U.  S.,  126  Fed.  Rep.  991,  sustaining  demurrer  and  again 
(1904)   129  Fed.  Rep.  506,  sustaining  amended  petition. 

As  to  when  interest  will  be  allowed  on  a  recovery  back  from 
the  government,  see  (1914)  Klock  Produce  Co.  v.  Hartson,  212 
Fed.  Rep.  758. 

Interest  allowed  in  judgment  for  recovery  of  taxes  wrongfully 
collected  against  protest  and  promptly  reclaimed  by  suit.  (1900) 
Penna.  Co.  for  Ins.  v.  McClain,  105  Fed.  Rep.  367,  affirmed  106 
Id.  618. 

Delay  in  prosecuting  the  reclaim  affects  the  right  to  interest. 
(1900)  Burrough  v.  Abel,  105  Fed.  Rep.  366. 

As  to  recovery  of  legacy  tax  (Act  1898,  c.  448;  30  Stat.  448) 
from  executor  or  legatee  or  the  property,  and  by  what  proceed- 
ings, see  (1914)  U.  S.  v.  Priest,  210  Fed.  Rep.  332;  (1911)  U.  S. 
V.  Fidelity  Trust  Co.,  222  U.  S.  158,  on  refunding  inheritance 
tax  (Acts  of  1898,  c.  448;  1902,  c.  1160);  distinguishing  (1905) 
"Vanderbilt  v.  Eidman,  196  U.  S.  480. 


THE  WAR  REVENUE  LAW.  119 

A  broker  who  sues  to  recover  taxes  wrongfully  collected  must 
be  able  to  set  forth  in  his  bill  or  a  bill  of  particulars  all  the 
transactions  in  question.  (1905)  Haight  &  Freese  v.  McCoach, 
135  Fed.  Rep.  894. 

A  person  who  is  in  fact  liable  for  a  special  tax  cannot  recover 
one  he  has  paid  on  the  ground  of  defective  or  illegal  assess- 
ment.    (1907)  Craft  v.  Schafer,  153  Fed.  Rep.  175. 

As  to  lost  stamps.  (1896)  U.  S.  v.  American  Tobacco,  166  U. 
S.  468;  (1903)  Cheeseborough  v.  U.  S.,  192  U.  S.  253;  Freeman 
V.  U.  S.,  157  Fed.  Rep.  195. 

Existing  La^vg  Made  Applicable ;  Construction  of  Tax  LaT?s. 

The  present  emergency  Act  makes  a  large  and  important  ad- 
dition to  existing  statute  law,  but  it  repeals  none. 

In  a  general  way,  the  provisions  here  made  applicable  are  to 
be  found  in  R.  S.  Title  XXXV,  especially  ch.  2,  as  to  assess- 
ment and  collection.  The  revision  is,  however,  so  old,  and 
there  are  so  many  separate  statutes  (not  always  carefully 
drafted  to  fit  into  the  scheme),  that  it  is  often  difficult  to  ascer- 
tain the  present  state  of  the  law.  The  easiest  quick  method,  in 
connection  with  the  internal  revenue  system,  is  to  examine  the 
official  compilation  issued  by  the  depatment  in  1911,  where  an 
attempt  is  made  to  sandwich  the  new,  and  the  amendatory, 
laws  among  the  sections  of  the  R.  S.  In  several  of  the  cases 
■cited  in  this  book,  on  construction  and  interpretation,  the 
courts  have  carefully  traced  the  statute  law  affecting  the  mat- 
ters under  consideration. 

In  the  main,  the  department  will,  in  collecting  this  new  emer- 
gency tax,  at  least  follow  its  own  relatively  recent  precedents 
(from  the  war  revenue  of  1898),  even  if  these  are  not  always 
followed  by  the  courts.  See  ante,  Introductory  and  post,  in  this 
chapter.  The  commissioner  has  large  powers  under  R.  S.  §  3447, 
as  to  establishing  methods  where  none  is  provided,  and  "  mak- 
ing such  regulations  as  may  have  become  necessary  by  reason 
of  any  alteration  of  law  in  relation  to  internal  revenue." 

There  is  some  confusion,  not  so  much  in  the  decisions  reached 
as  in  the  language  of  opinions,  regarding  the  way  in  which  tax 
laws  should  be  construed.  A  statute  may  impose  a  forfeiture  or 
other  penalty,  and  yet  not  be,  technically  speaking,  a  penal  law. 
Revenue  acts  are  not,  technically,  penal  laws.    Their  penalties 


120  THE  WAR  REVENUE  LAW. 

are  Imposed  primarily  to  prevent  fraud  and  accomplish  a  public 
good.     (1845)  Taylor  v.  U.  S.,  3  How.  U.  S.  197. 

Revenue  laws  are  not  like  penal  laws,  to  be  strictly  construed, 
but  should  be  construed  fairly  and  reasonably.  (1904)  U.  S.  v. 
Cole,  134  Fed.  Rep.  697;  (1901)  Eidman  v.  Martinez,  184  U.  S. 
578  and  cases  cited. 

Revenue  laws  are  remedial,  rather  than  penal,  and  a  defend- 
ant is  not  to  be  favored.  (1865)  Cliquot's  Champagne,  3  Wall. 
114,  145;  (1889)  U.  S.  v.  Stowell,  133  U.  S.  1,  12;  (1900)  U.  S.  v. 
246  1-2  Pounds  Tobacco,  103  Fed.  Rep.  791. 

Reveneue  laws  are  to  be  construed  in  a  way  to  favor  their 
enforcement.  (1845)  Taylor  v.  U.  S.,  3  How.  U.  S.  197;  (1874) 
Smythe  v.  Fiske,  23  Wallace,  374,  380;  (1832)  U.  S.  v.  Breed,  24 
Fed.  Cas.  1222,  No.  14,638;  (1870)  U.  S.  v.  Hodson,  10  Wallace, 
395;    (1887)    Chicago,  W.  &  St.  P.  v.  U.  S.,  127  U.  S.  406. 

License  taxes  should  receive  a  reasonable  construction,  fair 
to  both  parties.  (1900)  De  Bary  v.  Souer,  101  Fed.  Rep.  425; 
(1911)  John  J.  Sesnon  v.  U.  S.,  220  U.  S.  609,  denying  certiorari 
on  182  Fed.  Rep.  573. 

The  courts,  perhaps  not  always  consciously,  feel  that  there  is 
a  difference  among  revenue  laws,  and  that,  whatever  the  precise 
language  may  be,  some  offenses  are  more  serious  than  others. 
It  is  not  intended  to  say  that  judges  deliberately  permit  either 
their  own  temperamental  attitudes  or  their  views  of  public  opin- 
ion unduly  to  influence  them.  Psychologists  know  that  the  will  to 
do  right  and  the  desire  to  think  straight  do  not  make  up  all  the 
powers  and  suceptibilities  of  the  human  spirit.  Sympathy  is 
best  excluded  from  judgment  by  recognition  of  the  paramount 
necessity  for  uniform  and  certain  justice. 

Attempts  have  been  made  to  group  such  laws,  as  to  the  degree 
of  strictness  of  interpretability,  into  those  which  do,  and  those 
which  do  not,  impose  forfeitures  and  quasi-criminal  penalties. 
In  some  Instances  of  stamp  taxes,  however,  as  where  an  un- 
stamped instrument  is  excluded  from  evidence  or  record,  or  as 
a  check  which  cannot  be  cashed,  there  is  obviously  small  need 
of  judicial  severity  in  imposing  even  statutory  penalties.  On  the- 
other  hand,  regulative  or  quasi-police  power  taxes,  even  when 
the  statute  is  not  expressly  more  severe  (as  it  generally  is),  are 
Inevitably  regarded  by  all  public  law  officers  as  penal  or  quasi- 
penal.  ,1 


THE  WAR  REVENUE  LAW.  121 

It  is  a  settled  rule  that  general  comprehensive  legislation  on 
a  subject  is  not  superseded  by  later  special  or  narrower  legis- 
lation unless  the  contrary  clearly  appears.  Revised  Statutes, 
title  XXXV,  contains  such  general  laws.  Any  new  enactment 
imposing  internal  revenue  taxes  is  assumed  to  have  contemplated 
the  existence  of  the  established  system  of  revenue  laws  to  which 
resort  may  be  had  in  carrying  the  new  law  into  effect.  (1912) 
U  S.  v.  Barnes,  222  U.  S.  513,  holding  R.  S.  §  3177  applicable  to 
oleomargarine. 

The  letter  of  the  law  sometimes  crowds  the  spirit,  as  in  the 
case  of  the  peddler  who  had  a  license  but  failed  to  post  his 
name,  residence  or  number  conspicuously  on  his  vehicle  or  his 
goods.  He  was  convicted  (upheld  on  appeal),  although  he  was 
a  walking  peddler  and  carried  his  wares  in  his  pocket.  (1876) 
Commonwealth  v.  Cusick,  120  Mass.  183. 

A  construction  adopted  and  applied  by  an  executive  officer  is 
-entitled  to  much  weight  in  order  to  avoid  conflict  between  two 
departments  in  executing  a  law.  (1865)  Hugus  v.  Strickler,  19 
Iowa,  413;  (1865)  Smith  v.  Waters,  25  Ind.  397;  (1896)  In  re 
Mdse.  Imported  by  Hoyt,  75  Fed.  Rep.  998;  (1901)  Fairbank  v. 
U.  S.,  181  U.  S.  283,  308,  where  there  is  a  full  discussion  of  the 
value  of  contemporaneous  exposition  and  departmental  construc- 
tion of  statutes,  by  Brewer,  J.  And  see  cases  on  the  value  of 
the  commissioner's  rulings,  ante.  Introductory. 

English  courts  recognize  usages  of  the  stamp  office  as  a  prac- 
tical commentary  on  the  law,  although  not  conclusive.  Edwards 
on  The  Stamp  Act,  p.  9 ;  Tilsley  on  Stamp  Laws,  p.  10. 

The  court  (C.  C.  A.,  3d  Ct.),  in  (1901)  McClain  v.  Penna., 
etc.,  Co.,  108  Fed.  Rep.  618,  620,  passing  on  the  War  Tax  of 
1898,  said:  "If  we  were  not  fully  convinced  of  the  correctness 
of  the  views  we  have  expressed,  all  doubt  upon  the  subject  would 
be  removed  by  consideration  of  the  fact  that  the  War  Revenue 
Act  of  1864,  the  tax  imposing  language  of  which  was,  so  far  as 
material,  precisely  the  same  as  that  of  the  present  Act,  had  been 
officially  administered  in  accordance  with  our  understanding  of 
the  effect  of  that  language,  and  this  established  construction  of 
it  must  be  presumed  to  have  been  known  to  Congress  when  it 
again  used  the  same  language  in  the  Act  of  1898."  And  see 
(1904)  James  v.  Appel,  192  U.  S.  129,  135;  (1898)  U.  S.  v.  Wong 
Kim  Ark.  18,  Sup.  Ct.  Rep.  456.  But  cf.  (1873)  Dollar  Sav.  Bk. 
V.  U.  S.,  19  Wall.  227. 


122  THE  WAR  REVENUE  LAW. 

As  to  what  influence  congressional  proceedings  on  a  bill  should 
have  in  interpreting  an  Act,  see  27  Opin.  Atty.-Gen.  68,  and 
(1875)   U.  S.  V.  Union  Pacif.  R.  R.  Co.,  91  U.  S.  72. 

"  What  the  lawmakers  intended  to  do  is  immaterial  when 
what  they  actually  did  do  is  free  from  doubt."  Cox,  C.  J.,  in 
(1904)    N.  Y.   Telephone  v.  Treat,  130  Fed.  Rep.  340,  342. 

Revised  Statutes,  §  3449,  as  to  shipping  liquors  under  other 
than  proper  names  and  marks,  is  highly  penal  in  character  and 
should  be  construed  strictly.  (1902)  U.  S.  v.  20  Boxes,  123  Fed. 
Rep.  135,  affirmed  (1904)  133  id.  910. 

In  deciding  that  the  shipper  of  a  quantity  of  corn  liquor  in 
boxes  marked  "glass;  this  side  up  with  care,"  did  not  violate 
R.  S.  §  3449,  McDowell,  D.  J.,  uses  this  strange  language:  "If 
the  statute  applies  to  all  persons,  a  farmer  or  lawyer,  moving 
his  place  of  residence,  and  marks  the  box  '  household  goods,' 
is  liable  to  a  fine  of  $500  .  .  .  whether  one  bottle  or  a  large 
quantity  are  thus  moved."     (Italics  ours. — Why  "lawyer?"!) 

The  construction  should  be  fair  to,  if  not  in  direct  favor  of, 
the  taxpayer.  (1902)  McNally  v.  Field,  119  Fed.  Rep.  445,  448 
(stamp  tax  of  1898) ;  (1902)  U.  S.  v.  Mullins,  119  Fed.  Rep.  334 
(tax  on  spirits) ;  (1904)  Benziger  v.  U.  S.,  192  U.  S.  38,  55 
(tariff);  (1896)  Mutheson  &  Co.  v.  U.  S.,  71  Fed.  Rep.  394 
(tariff);  (1893)  Rice  &  Co.  v.  U.  S.,  53  Fed.  Rep.  910  (tariff); 
(1891)  American  Twine  Co.  v.  Worthington,  141  U.  S.  468,  474 
(tariff);  (1887)  Hartranft  v.  Wiegmann,  121  U.  S.  609,  616 
(tariff);  (1873)  U.  S.  v.  Isham,  17  Wall.  496  (stamp  tax  of 
1864) ;  (1870)  U.  S.  v.  Hodson,  10  Wall.  395  (distiller) ;  (1868) 
U.  S.  V.  Olney,  1  Abb.  U.  S.  275  (lottery). 

Stamp  laws  are  positivi  juris,  involving  nothing  of  principle  or 
reason.  (1834)  Morley  v.  Hall,  2  Dowl.  494.  They  are  to  be 
construed  strictly,  with  liberality  as  to  exceptions.  (1827)  U.  S. 
V.  Gooding,  12  Wheat.  460.  (1807)  Warrington  v.  Furbor,  8  East. 
242.  The  government  will  not  be  given  the  benefit  of  an  uncer- 
tain law.  (1855)  Gurr  v.  Scudds,  11  Exch.  R.  (H.  &  G.)  190; 
(1828)    Doe  v.  Amos,  2  M.  &  R.  180. 

Stamp  laws  have  been  held  directly  penal,  in  restraint  of  com- 
mon right  and  to  be  construed  strictly.  (1865)  Hugus  v.  Strickler, 
19  Iowa,  413;  (1864)  Celley  v.  Gray,  37  Vt.  136;  (1868)  Boyd  v. 
Hood,  57  Pa.  98;  (1867);  Vail  v.  Knapp,  49  Barb.  299;  (1869) 
New  Haven,  etc.,  Co.  v.  Quintard,  31  How.  Pr.  29. 


THE  WAR  REVENUE  LAW.  123 

"A  thing  may  be  within  the  letter  of  a  statute  and  not  within 
its  meaning,  and  within  its  meaning,  though  not  within  Its  letter. 
The  intention  of  the  lawmaker  is  the  law."  (1874)  Smythe  v. 
Fiske,  23  Wall.  374,  380,  holding  that  revenue  laws  are  to  be  con- 
strued liberally,  as  not  being  rigidly  penal. 

"  In  cases  of  serious  ambiguity  in  the  language  of  the  Act, 
•or  doubtful  classification  of  articles,  the  construction  is  to  be 
in  favor  of  the  importer,  as  duties  are  never  imposed  on  the 
citizen  upon  vague  or  doubtful  interpretations."  (1863)  Powers 
V.  Barney,  5  Blatchf.  202  (tariff).  And  see  (1873)  U.  S.  v.  Isham, 
17  Wall.  496,  504;  (1886)  Hartranft  v.  Weigmann,  121  U.  S.  609; 
a855)  Gurr  v.  Scudds,  11  Exch.  R.  (H.  &  G.)  190;  (1828)  Doe 
V.  Amos,  2  M.  &  R.  180. 

It  is  constitutional  to  increase  an  excise  as  well  as  a  property 
tax,  and  such  an  increase  may  be  made  at  least  while  the  prop- 
erty is  held  for  sale  and  before  it  has  passed  into  the  hands 
of  the  consumer.  (1902)  Patton  v.  Brady,  184  U.  S.  608,  a  to- 
bacco case,  with  an  interesting  general  discussion  of  excise  law 
in  the  opinion  of  Brewer,  J. 

Held,  under  the  Act  of  1898,  that  tax  stamping  of  tobacco  in 
the  factory  at  the  old  rate  was  a  constructive  removal  and  war- 
ranted the  assessment  of  the  additional  tax.  (1900)  Robards 
Tobacco  Co.  v.  Franks,  103  Fed.  Rep.  276,  affirmed,  112  id.  784. 

Congress  may  tax  anything  except  exports;  but  its  direct  taxes 
must  be  apportioned,  and  its  indirect  taxes  must  be  uniform. 
(1866)  License  Tax  Cases,  5  Wall.  462,  occupation  tax.  Act  of 
1864;  (1894)  Income  Tax  Cases,  157  U.  S.  429,  income  tax  of 
1894;  (1898)  Nicol  v.  Ames,  173  U.  S.  509,  war  tax  1898,  sale  on 
exchange;  (1880)  Springer  v.  U.  S.,  102  U.  S.  586,  income,  Act  of 
1864,  1865;  (1903)  Spreckles  v.  McClain.  192  U.  S.  397,  48  L.  R.  A. 
496,  on  sugar  refining,  1898;  (1868)  Pacific  Ins.  Co.  v.  Soule,  7 
Wall.  433,  income  tax.  Acts  of  1864,  1866. 

But  the  federal  government  may  not  tax  either  the  property 
or  the  instrumentalities  of  a  State.  (1894)  Pollock  v.  Trust  Co., 
157  U.  S.  429,  584.     And  see  notes,  ante,  under  §  15. 

Further,  as  to  constitutionality  of  internal  revenue  laws,  see 
(1903)  Thomas  v.  U.  S.,  192  U.  S.  363,  48  L.  Ed.  481,  as  to  memo- 
randum of  stock  sale;  (1901)  Bettman  v.  Warwick,  108  Fed.  Rep. 
46,  as  to  a  notary  public's  official  bond;  (1901)  Dougherty  v. 
U.  S.,  181  U.  S.  622,  45  L.  Ed.  1033,  as  to  oleomargarine;  (1910) 
Flint  v.  Stone  Tracy  Co.,  220  U.  S.  107,  55  L.  Ed.  389,  as  to  cor- 


124  THE  WAR  REVENUE  LAW. 

poration  excise  tax;  (1901)  Patton  v.  Brady,  184  U.  S.  608,  46  L. 
Ed.  713,  as  to  the  increased  tobacco  tax  under  the  Act  of  1898; 
(1905)  South  Carolina  v.  U.  S.,  199  U.  S.  437,  50  L.  Ed.  261. 

Sec.  24.  That  the  provisions  of  this  Act  shall  take 
effect  on  the  day  next  succeeding  the  date  of  its 
passage,  except  where  otherwise  expressly  provided : 
Provided,  That  on  the  day  after  the  thirty-first  day 
of  December,  nineteen  hundred  and  fifteen,  the  taxes 
levied  under  this  Act  shall  no  longer  be  levied  and 
collected,  but  all  taxes  arising  or  accruing  before 
said  date  shall  continue  to  be  collectible  under  the 
terms  of  this  Act:  Provided,  however,  That  on  and 
after  the  first  day  of  January,  nineteen  hundred  and 
sixteen,  the  provisions  of  section  thirty-three  hun- 
dred and  thirty-nine  of  the  Eevised  Statutes,  as 
amended  by  an  Act  approved  April  twelfth,  nineteen 
hundred  and  two,  imposing  a  tax  on  fermented 
liquors  shall  not  be  affected  by  any  limitation  as  to 
the  levying  or  collecting  of  the  additional  tax  im- 
posed by  this  Act  on  such  fermented  liquors,  but 
shall  then  be  in  full  force  and  effect  on  and  after  the 
said  first  day  of  January,  nineteen  hundred  and  six- 
teen. All  stamps  provided  for  in  this  Act  unused 
after  the  aforesaid  date  shall  be  redeemed  from  the 
holder  thereof,  under  such  rules  as  the  Secretary 
of  the  Treasury  may  prescribe. 

Approved,  October  22,  1914. 

When  the  Act  Takes  Effect;  When  the  Taxes  Cease. 

As  the  Act  was  approved  October  22,  1914,  it  became  generally 
operative,  in  effect,  at  midnight  of  that  day.  This  applied  to  the 
beer  and  wine  taxes,  §§  1,  2. 


THE  WAR  REVENUE  LAW.  125 

The  special  taxes  were  imposed  as  on  November  1,  1914.  This 
applies  to  all  the  occupation  or  license  taxes,  §  3. 

The  documtntary  stamp  taxes  were  levied  as  on  December  1, 
1914,  §  5. 

The  merchandise  stamp  taxes  attach  to  taxable  articles  on 
November  21,  1914  (§  21),  though  the  general  imposition  section 
(§  5)  and  the  general  penalty  section  (§  17)  fix  December  1, 
1914. 

All  taxes  imposed  by  this  Act  cease  on  December  31,  1915, 
but  taxes  which  accrue  before  that  date  may  be  enforced  there- 
after.    Cf.  notes  under  §  11. 

A  repeal  does  not  extinguish  a  penalty  or  liability  once  in- 
curred, and  the  law  remains  valid  for  enforcement.  R.  S.  §  13; 
(1888)  U.  S.  V.  Reisinger,  128  U.  S.  398;  (1910)  Hertz  v.  Wood- 
man, 218  U.  S.  205;  (1873)  Stockdale  v.  Insurance  Cos.,  20  Wall. 
323;  (1874)  Blake  v.  Natl.  Banks,  23  Wall.  307.  3  Fed.  Stat. 
Annotated,  762. 

As  to  enforcing  a  repealed  tax,  and  as  to  whether  a  beneficial 
Interest  in  an  estate  is  vested  and  taxable,  see  also  (1904) 
Land  Title  &  Trust  v.  McCoach,  127  Fed.  Rep.  381,  129  Fed. 
Rep.  901;  (1904)  Phila.  Trust  v.  McCoach,  127  Fed.  Rep.  386, 
135  Fed.  Rep.  866,  129  Fed.  Rep.  906,  affirmed  (1906)  203  U.  S. 
594,  no  opinion;  (1904)  Brown  v.  Kinney,  128  Fed.  Rep.  310; 
(1904)  Peck  V.  Kinney,  128  Fed.  Rep.  313;  (1905)  Eidman  v. 
Tilghman,  136  Fed.  Rep.  141,  afllrmed  (1906)  by  divided  court, 
203  U.  S.  580,  no  opinion. 

The  proviso  in  §  24,  as  to  fermented  liquors,  was  necessary 
because  of  the  form  of  language  used  in  §  1.  Instead  of  im- 
posing an  additional  tax  as  such,  or  merely  changing  the  rate, 
it  imposes  the  increased  tax  in  lieu  of  the  former  tax.  The  pur- 
pose of  the  proviso  is,  therefore,  to  insure  the  automatic  restora- 
tion of  the  former  tax  on  January  1,  1916. 

Although  the  Act  was  planned  as  an  emergency  measure,  and 
was  in  good  faith  passed  as  such  in  the  hope  that  the  taxes 
would  not  longer  be  required,  it  was  latterly  distinctly  intimated 
in  Congress  that  the  time  limitation  might  have  to  be  removed 
or  advanced.  It  is  likely  that,  if  more  revenue  is  needed,  it  may 
"be  sought  by  further  increasing  the  beer  tax,  and  by  adding  taxes 
on  rectified  spirits  and  automobiles  or  gasoline.  All  these  things 
~were  in  contemplation  and  under  discussion  while  the  present 


126  THE  WAR  REVENUE  LAW. 

measure  was  in  preparation.  Tobacco  products,  proprietary 
medicines,  bank  checks,  deposit  slips,  bills  of  exchange,  leases, 
and  mortgages  are  also  among  the  probable  objects. 

Outlying  and  Insular  Possessions. 

Revised  Statutes,  §  3448,  applies  the  existing  laws  to  spirits, 
liquors,  tobacco,  snuff  and  cigars,  produced  anywhere  within  the 
exterior  boundaries  of  the  United  States  whether  or  not  within 
a  revenue  district. 

Alaska  was  made  part  of  the  Oregon  district  in  1872. 

Indian  lands  are  included,  despite  treaties.  (1883)  U.  S.  v. 
43  Gals.  Whisky,  108  U.  S.  491. 

The  U.  S.  internal  revenue  system  as  a  whole,  does  not  apply 
to  Porto  Klco.  Under  the  Foraker  Act,  April  12,  1900,  c.  191 
(31  Stat.  77),  each  country  receiving  goods  from  the  other  col- 
lected its  own  internal  revenue  on  shipment  from  each  to  the 
other  in  lieu  of  tariff  dues.    (1913)  Jordan  v.  Roche,  228  U.  S.  436. 

The  Foraker  Act  was  held  constitutional.  (1900)  Downes  v. 
Bidwell,  182  U.  S.  244,  in  imposing  duties  on  imports,  as  the 
island  was  not  a  part  of  the  U.  S.  for  revenue  purposes. 

Porto  Rico  has  her  own  system  of  excise,  for  her  own  benefit, 
in  lieu  of  the  internal  revenue  system  of  the  U.  S.  A  general 
revenue  bill  was  enacted  by  the  insular  legislature,  approved' 
January  31,  1901,  imposing  taxes  on  spirits,  tobacco,  cards,  medi- 
cinal preparations,  oleomargarine,  arms  and  ammunition,, 
matches,  liquor  dealers  and  certain  documentary  stamp  taxes. 
Dr.  Jacob  H.  Hollander,  Excise  Taxation  in  Porto  Rico,  in  the 
Quarterly  Journal  of  Economics,  February,  1902. 

Section  14  of  the  Foraker  Act  makes  U.  S.  laws  effective  in 
Porto  Rico,  "  except  the  internal  revenue  laws,  which,  in  view 
of  the  provisions  of  section  three,  shall  not  have  force  and 
effect  in  Porto  Rico."    T.  D.  216,  Sept.  25,  1900. 

Section  three  of  the  same  Act  imposes  on  P.  R.  goods  cominR 
into  U.  S.  the  same  internal  revenue  taxes  as  are  imposed  by 
law  on  domestic  goods. 

Porto  Rico  cigars  brought  to  the  U.  S.  require  the  same  stamps 
here  as  domestic  cigars.  Circulars  54  and  56,  April,  1900;  81, 
July,  1901;  85,  Aug.,  1901. 


THE  WAR  REVENUE  LAW.  127 

As  to  bay  rum  brought  from  P.  R.  (1908)  Newhall  v.  Jordan, 
160  Fed.  Rep.  661,  following  Cheseborough  v.  U.  S.,  192  U.  S.  253, 
that  a  tax  paid  by  mistake  cannot  be  recovered.  S.  c.  (1906) 
149  Fed.  Rep.  586;  (1908)  Anderson  v.  Newhall,  161  Fed.  Rep. 
906;  (1913)  Jordan  v.  Roche,  supra.  See  Act  of  Feby.  4,  1909,  ch. 
65;  T.  D.  1462,  1481;  circular  No.  734. 

There  is  a  deputy  U.  S.  collector  at  San  Juan.  Act  of  June 
29,  1906;  T.  D.  1031;  circular  No.  679.  See  Tariff  Act  of  1913, 
c.  16,  Oct.  3,  §  4,  subd.  D. 

Porto  Rico  is  now  American  territory  de  facto  and  de  jure. 
(1907)  Ponce  v.  R.  C.  Church,  210  U.  S.  296. 

The  Treasury  Department  has  issued  circulars,  e.  g.,  Nos. 
57,  59,  606,  693. 

The  internal  revenue  laws  of  the  island  are  found  in  chs.  2, 
3  of  Tit.  IX  of  the  Political  Code,  §§  3024-3090  of  Revised  States 
of  Porto  Rico,  1911. 

Under  the  organic  Act  of  April  30,  1900,  ch.  339;  31  Stat.  141,. 
the  Territory  of  Hawaii  was  made  a  revenue  district.  From  the 
annexation  (July,  1898)  to  June  14,  1900,  when  tlie  organic  Act 
took  effect,  Hawaii  was,  as  to  commercial  relations,  deemed 
foreign  territory.  After  June  14,  1900,  goods  taxable  for  internal 
revenue  in  this  country  could  not  be  sent  to  Hawaii  without  pay- 
ing this  tax.  T.  D.  120,  May  5,  1900;  125,  May  12,  1900;  157, 
June  14,  1900.  (1857)  Simpson  v.  Peaslee,  20  How.  571,  was 
cited  to  support  the  ruling  that  the  date  of  the  sailing  of  the 
ship  would  determine  whether  a  consignment  was  taxable. 
(1904)  The  Kawailani,  128  Fed.  Rep.  879. 

Philippines. 

From  the  ratification  of  peace,  April  11,  1899,  to  November, 

1901,  the  islands  were  commercially  treated  as  foreign,  though 
certain  taxable  articles  might  be  bonded  for  consumption  there. 
The  Supreme  Court  decided  that  they  were  not  foreign  after  their 
cession,  and  they  thus  acquired  a  status  like  Porto  Rico's.  (1901) 
Pepke  V.  U.  S.,  cited  also  as  14  Diamond  Rings,  183  U.  S.  176. 

A  temporary  civil  government  was  established  pursuant  to 
the  Act  of  March  2,  1901,  31  Stat.  910,  and  the  Act  of  July  1. 

1902,  32  Stat.  691,  which  exempted  certain  exports  to  the  P.  I. 
and  allowed  rebates  or  drawbacks  as  on  exports  to  strictly 
foreign  countries. 


128  THE  WAR  REVENUE  LAW. 

Taxable  materials  were  exempted  for  export  by  the  Act  of 
March  8,  1902,  32  Stat.  54. 

The  Philippine  Commission  enacted  The  Internal  Revenue  Law 
of  1904  (July  2)  for  the  islands.  They  have  their  own  bureau 
and  a  complete  administrative  machinery  for  the  enforcement 
of  an  elaborate  law  covering  license  taxes,  alcohol,  tobacco, 
banking,  documentary  stamp  taxes,  capitation  tax,  insurance, 
forestry,  mining,  business,  manufacture  and  occupation.  In- 
ternal taxation  in  the  Philippines.  By  John  S.  Ford,  Baltimore, 
1907,  Johns  Hopkins  University  Studies,  Series  XXV,  No.  1. 

The  U.  S.  Congress  ratifies  the  acts  of  the  Commission.  See 
Act  of  Feb.  9,  1909,  c.  101. 

The  Act  of  Aug.  5,  1909,  36  Stat.  83,  equalized  duties;  exempted 
from  the  P.  I.  internal  revenue  laws  taxable  articles  for  export 
to  the  U.  S.  (where  they  pay  a  revenue  tax  in  lieu  of  customs; 
exempted  from  U.  S.  internal  revenue  laws  taxable  articles  for 
export  to  the  islands  (where  they  pay  a  revenue  tax),  and  pro- 
vided that  all  internal  revenue  collected  in  or  for  account  of  the 
islands  should  go  intact  to  the  insular  treasury  for  the  general 
government  of  the  Philippines. 

The  Tariff  Act  of  1913,  Act  of  Oct.  3,  c.  IG,  re-embodies  a  like 
system. 

The  Treasury  Department  has  issued  rulings  and  instructions, 
circulars  No.  39,  July  1,  1910;  No.  57,  Nov.  1,  1909;  No.  37,  Aug. 
10,  1909;  No.  8.  regulations  revised  to  July  1,  1910. 


THE  WAR  REVENUE  LAW.  129 

BIBLIOGRAPHICAL   NOTES. 


These  are,  of  course,  only  suggestive,  and  do  not 
purport  to  be  exhaustive. 

Acts  of  Congress.  It  is  not  enough  to  examine  the  Revised 
Statutes,  even  with  amendments.  Reference  must  be  had  to 
the  Statutes  at  Large. 

Compilations  of  Statutes.  Such  have  been  issued  by  the  De- 
partment from  time  to  time.  For  older  laws  it  is  necessary  to 
examine  older  editions.  The  volume  constitutes  an  Internal 
Revenue  Manual,  for  the  use  of  officers  and  agents.  The  latest 
official  compilation  was  issued  in  1911  under  the  title  Internal 
Revenue  Laws,  (Compiled.  As  the  Act  of  1914  is  intended  to  be 
temporary,  it  may  not  be  embodied  as  a  whole  in  any  such  per- 
manent general  compilation. 

Myer's  Federal  Decisions.    Tit.  Internal  Revenue. 

Morgan's  Digest  of  Tariff  and  Customs  Laws. 

Internal  Berenne  Record.  An  unofficial  publication,  begun  in 
1865  and  discontinued  after  December,  1897.  This  is  often  re- 
ferred to  as  though  authoritative,  and  some  things  in  it  are  not 
found  elsewhere.  The  annotations  ante,  discuss  the  value  of 
such  department  rulings  as  are  herein  reported. 

Treasury  Decisions,  published  weekly.  Since  January  1,  1898, 
these  have  embraced  the  internal  revenue  rulings  and  circulars. 
The  pertinent  decisions  are  usually  republished  by  the  Commis- 
sioner in  his  circulars.    The  whole  series  is  grouped  in  volumes. 

Opinions  of  Attorney-GeneraL  These  are  serially  issued  and 
later  grouped  in  volumes.  Those  which  are  pertinent  are  re- 
published in  the  Commissioner's  circulars. 

Coxe,  History  of  the  Internal  Revenue  System,  1796. 


130  THE  WAR  REVENUE  LAW. 

Edwards,  Charles.  Practical  Treatise  of  the  Stamp  Act  of  July 
1,  1862  (399  pp.,  N.  Y.,  1863).  Intended  to  assist  the  initiation 
of  the  Civil  War  taxes,  by  citing  English  precedents,  drawing 
chiefly  from  Collins  and  from  Tilsley. 

Bontwell,  Geo.  S.  The  Commissioner,  who  organized  the  I.  T. 
department,  published  a  manual  of  the  Direct  and  Excise  Tax 
System,  with  regulations,  rulings,  etc.,  4th  ed.,  1864. 

Bontwell,  Geo.  S.  The  Taxpayers'  Manual,  an  indexed  com- 
pilation of  revenue  laws.    Boston,  1866. 

Bedfield,  A.  A.    Handbook  of  the  U.  S.  Tax  Law  of  1862-63. 

Dresser,  Horace.  The  Internal  Revenue  Laws  as  amended  to 
July,  1866,  with  marginal  references,  index  and  table  of  taxes 
and  exemptions.    A  compilation.    N.  Y.,  1866.     Later,  1870,  1872. 

Emerson,  Chas.  N.  New  Internal  Revenue  Guide  to  the  Act 
of  July,  1868;  in  Handbook  of  the  Internal  Revenue.     1868. 

Bnmp,  Orlando  F.  Internal  Revenue  Statutes,  with  notes  of 
decisions,  rulings,  etc.  Pp.  430,  N.  Y.,  1870.  A  serious  attempt 
to  bring  together  all  valuable  and  suggestive  administrative  pre- 
cedents. 

Dsvidge  and  Kimball.  Compendium  of  Internal  Revenue  Laws, 
with  decisions,  forms,  etc.    Wash.,  D.  C,  1871. 

Collection  of  Circulars  and  Specials,  issued  by  the  Office  of 
Internal  Revenue  to  January  1,  1871  (334  pp.),  contains  num- 
bered circulars,  general  and  special,  and  also  unnumbered  cir- 
culars arranged  chronologically.  This  service  was  continued 
after  the  Act  of  1898.    Cf.  Treas.  Dec,  supra. 

Parsons  on  Contracts.  The  5th  edition,  vol.  3,  pp.  286-349, 
ch.  10,  pt.  2,  treated  fully  of  the  law  of  stamps  in  its  application 
to  instruments.    Other  editions  do  not  contain  this  matter. 

Hilliard's  Law  of  Taxation..  Boston,  1875. 

Burroughs'  Treatise  on  the  Law  of  Taxation.    N.  Y.,  1877. 

Elmes,  Webster.  The  Executive  Departments.  Wash.,  D.  C, 
1879. 


THE  WAR  RE3VENUE  LAW.  131 

Gerard's  Titles  to  Real  Estate.    Ch.  VII. 

Eldridge,  C.  W.    The  U.  S.  Internal  Revenue  Tax  System,  1895. 

Howe's  Taxation  and  Taxes  in  the  U.  S.,  under  the  Internal 
Revenue  System,  1791-1895.     1896. 

The  War  Beyenne  Law  of  1898.  Annotated  by  Heydecker  and 
McMahon,  Albany,  1898. 

War  Reyenne  Law  of  1898.    Explained  by  Gould  and  Savary, 

Boston,  1898. 

Ash's  Annotated  Internal  Beyenae  Laws.    1899. 

Gould  and  Tucker's  Federal  Income  Tax.    1894. 

Frost's  Federal  Income  Tax.  1913.  An  exhaustive  and  prac- 
tical work  on  the  Income  Tax  Law.  Every  section  of  the  law 
has  received  careful  treatment.  Attention  is  called  therein  not 
only  to  decisions  of  the  courts  having  a  bearing  upon  the  in- 
terpretation of  the  Act,  but  in  addition  references  are  made  to 
rulings  of  the  Treasury  Etepartment  rendered  in  connection  with 
previous  Income  Tax  Acts,  together  with  reference  to  the  opin- 
ions of  the  attorneys  general  of  the  United  States,  and  to  deci- 
sions of  the  English  courts  upon  existing  provisions  of  the  Eng- 
lish Income  Tax  Laws  which  are  similar  or  closely  analagous 
to  the  Federal  Income  Tax  Law  of  1913. 

Frost's  Federal  Corporation  Tax.  1911.  An  exhaustive  work 
on  the  Federal  Corporation  Tax  Law.  Among  the  many  topics 
treated  are  the  following:  Nature  of  the  Federal  Corporation 
Tax  Enactment;  Full  Text  of  the  Decision  of  the  U.  S.  Supreme 
Court  sustaining  the  constitutionality  of  the  Act;  a  Discussion 
of  the  Rules  of  construction  and  interpretation,  showing  Scope 
and  Intent  of  Act;  Tax  Returns  fully  discussed  in  a  chapter; 
Fundamental  basis  on  which  the  tax  is  laid,  correction  and  re- 
vision of  returns;  Mode  of  Assessment  and  Collection  of  the 
Tax,  together  with  an  extended  consideration  of  the  subject 
matter  of  court  procedure. 

It  also  gives  the  following:  Full  text  of  the  Act;  Treasury 
regulations  relating  to  the  Collection  of  the  Tax;  Opinions  of 
the  Attorney-General  relative  thereto;   Forms  of  returns;   Sec- 


132  THE  WAR  REVENUE  LAW. 

tions  of  the  U.  S.  Revised  Statutes  applicable  to  the  collection 
■and  payment  of  the  Federal  Corporation  Tax. 

Foster's  Federal  Income  Tax.    1913. 

Cooley  on  Taxation,  3d  ed.  1913,  eh.  XIV. 

Seligman's  Essays  on  Taxation. 

Jndson,  Frd'k  N.  The  Power  of  Taxation,  State  and  Federal. 
St.  Louis,  1903. 

Books  on  Federal  Practice. 

State  Court  Digests  and  Reports,  espec.  on  License  Taxes. 
English: 

Stamp  Taxes  are  so  old  and  so  well  established  in  England, 
that  the  large  body  of  British  precedent  is  often  of  value,  even 
if  only  by  way  of  analogy. 

Stamp  Acts.  55  Geo.  Ill,  c.  184;  7  &  8  Geo.  IV,  c.  55;  16  &  17 
Vict.  c.  51  (1853) ;  33  &  34  Vict.  c.  97  (1870) ;  54  &  55  Vict.  c.  39 
(1891) ;   and  numerous  amendments. 

Copinger,  W.  A.    Tables  of  Stamp  Duties.    London,  1878. 

Collins,  Geo.  Wm.  The  Stamp  Laws  considered  with  a  view 
to  their  influence  on  the  admission  of  deeds,  etc.    London,  1841. 

Tilsley,  Hugh.  A  Treatise  on  the  Stamp  Laws,  etc.  A  stand- 
ard work.     London,  1847. 

Dowell,  Stephen.  A  History  of  Taxation  and  Taxes  in  Eng- 
land from  the  earliest  times  to  the  present  day.  4  vols.  A 
standard  work.    London,  1884. 

Griffith,  G.  C.    A  Digest  of  the  Stamp  Duties. 

Heraud,  J.  A.    A  Digest  of  the  Stamp  Laws.    London,  1801. 

Piper's  Stamp  Laws  and  Duties.    A  modern  work. 

Chitty's  Law  of  Contracts.  15th  ed.  1909,  ch.  vi,  pp.  125-152, 
on  the  stamping  of  contracts. 


THE  WAR  REVENUE  LAW.  133 

Dowell,  Stephen.  A  History  and  Explanation  of  the  Stamp 
Duties  and  the  Stamp  Laws  at  present  in  force  in  the  United 
Kingdom.     London,  1873.     Later  ed. 

Heron,  D.  C.  History  of  Jurisprudence,  sub.  cap.,  Taxation. 
London,  1860. 

Edirards,  Isaac.    A  Treatise  on  Bills,  etc.,  ch.  xiv  on  Stamp*. 

Byles  on  Bills  of  Exchange,  ch.  ix  on  the  Stamp  Law. 

Chitty's  Statutes.    Tit.  Stamps. 

Jarris  on  the  Income  Tax.    1912.    With  forms. 

Dowell's  Income  Tax  Laws,  7th  ed.  (Piper),  1913. 

Hlghmore's  Stamp  Laws,  2d  ed.    London,  1902. 

Alpe's  Law  of  Stamp  Duties. 

Buxton,  Sydney.    Pinance  and  Politics.    London,  1888. 

Periodicals,  legal  and  other,  as  e.  g..  How  we  pay  for  the  war. 
Outlook,  59:19. 

Tax  collecting  by  U.  S.  Government.  Natl.  Mag,  Boston, 
24:365. 

Taxation  of  Life  Insurance.    Indep.  64:383,  Feb.  13,  1908, 

Corporation  Excise  Tax.  40  Washington  Law  Reporter,  716, 
Nov.  1,  1912. 

Stamp  Duties  on  voluntary  transfers.  133  Law  Times,  76,  May 
25,  1912. 

Bills  of  Exchange,  recent  decisions.  28  Scot.  Law  Rev.  200, 
Sept.,  1912. 

The  Revenue  Act  1911.    46  Irish  Law  Times  13,  Jany.  20,  1912. 

The  Stamping  of  Receipts,  Act  of  1891.  43  Irish  Law  T.  47, 
Feb.  20,  1909. 

Stamp  Duty  on  Increase  of  Capital.  44  Law  Journal  (Eng- 
land)  115,  Feb.  20,  1909. 

Local  taxation  license  duties.  72  Justice  of  the  Peace  (Lon- 
don) 350,  July  25,  1908. 

Stamp  Taxes  on  Newspapers,  Academy   (London)   58:309. 

Etc.,  etc. 


SUMMARY    TABLE    OF    TAXES. 


Beer,  ale,  porter,  on  every  barrel  of  31  gals.  .        $1.50 
Wines,  domestic  and  imported: 
Still  wines: 

bottle,  y^  pint  or  less .  OOI4 

bottle,  %  pint  or  less .  00^/^ 

bottle,  1  pint  or  less .01 

bottle,  1  quart  or  less ,02 

other  containers  at  the  gallon  rate  of .  .  .  .08 

Sparkling  wines  and  champagnes: 

bottle,  ^  pint  or  less .05 

bottle,  1  pint  or  less .10 

bottle,  1  quart  or  less .20 

other  containers,  at  the  quart  rate  of ...  .  .20 

Liqueurs,  cordials,  etc. : 

bottle,  1/^  pint  or  less .  011/^ 

bottle,  1  pint  or  less .03 

bottle,  1  quart  or  less .06 

other  containers,  at  gallon  rate  of .24 

Grape  brandy  or  wine  spirits,  used  only  for 
fortifying  sweet  wines  under  strict  regula- 
tions, per  gallon .55 

Special,  occupation  or  license  taxes,  annual: 
banker,  on  each  $1,000  capital,  including 

surplus  and  imdivided  profits 1 .  00 

stock  broker,  etc 30 .  00 

[13^] 


136  SUMMARY  TABLE  OF  TAXES. 

pawnbroker $50 .  00 

commercial  broker 20 .  00 

custom-house  broker   10 .  00 

theatre,  etc.,  proprietor: 

seating  capacity  not  more  than  250.  ...        25.00 

seating  capacity,  251  to  500 50.00 

seating  capacity,  501  to  800 75.00 

seating  capacity,  801  and  up 100 .  00 

circus,  proprietor,  in  each  State 100 .  00 

Other  shows,  exhibitions,  etc.,  proprietor  or 
agent,  in  each  State:  (Educational,  agri- 
cultural, etc.,  exempt) 10 .  00 

Bowling  and  billiards,   proprietor,   for   each 

alley  and  each  table 5 .  00 

Commission  merchant,  except  those  paying 
as  commission  broker  and  co-operative 
houses 20 .00 

Tobacco  dealers: 

leaf  dealers  up  to  1,000  lbs.,  annually exempt 

leaf  dealers,  1,000  to  50,000  lbs.  annually .  .  6 .  00 

leaf  dealers,  50,000  to  100,000  lbs.  annually  12 .  00 
leaf  dealers,  over  100,000  lbs.  annually.  .  .  24.00 
dealers  generally  in  any  form  of  tobacco, 

whose  annual  sales  exceed  $200 4 .  80 

Manufacturer  selling  own  goods  at  factory  is 
not  a  dealer. 

Tobacco  manufacturers:     One  tax  for  maker 
of  several  kinds, 
sales  not  exceeding  100,000  lbs  annually.  .  6.00 

sales,  100,000-200,000  lbs.  annually 12.00 

sales,  200,000-400,000  lbs.  annually 24.00 


SUMMARY  TABLE  OF  TAXES.         13^ 

sales,  400,000-1,000,000  lbs.  annually $60.00 

sales,  1,000,000-5,000,000  lbs.  annually..  300.00 
sales,  5,000,000-10,000,000  lbs.  annually .  .  600 .  00 
sales,  10,000,000-20,000,000  lbs.  annually.  1,200.00 
sales  exceeding  20,000,000  lbs.  annually.  .  2,496.00 

Cigar  manufacturers: 

sales  not  exceeding  100,000  cigar  annually.  3.00 
sales,  100,000-200,000  cigars  annually...  6.00 
sales,  200,000-400,000  cigars  annually.  .  .  12.00 
sales,  400,000-1,000,000  cigars  annually.  .  30.00 
sales,  1,000,000-5,000,000  cigars  annually .  150 .  00 
sales,  5,000,000-20,000,000  cigars  annually  600 .  00 
sales,  20,000,000-40,000,000  cigars  an- 
nually  1,200.00 

sales,  40,000,000  and  up 2,496 .  00 

Cigarette  manufacturers: 

annual  sales,  not  above  1,000,000  cigarettes       12 .  00 

annual  sales,  1,000,000-2,000,000 24.00 

annual  sales,  2,000,000-5,000,000 60 .  00 

annual  sales,  5,000,000-10,000,000 120.00 

annual  sales,  10,000,000-50,000,000 600.00 

annual  sales,  50,000,000-100,000,000 1,200.00 

annual  sales  exceeding  100,000,000 2,496.00 

STAMP  TAXES. 

Schedule  A.  Documentary: 

bonds,  stock  certificates,  etc.,  on  each  $100 

face  value    .05 

stock,  every  sale,  transfer,  delivery,  etc.,  on 

each  $100  face  value  or  less .02" 

sale  of  products  on  exchange  or  board,  mem- 


138  SUMMARY  TABLE  OF  TAXES. 

orandum  required,  tax  on  each  $100  of 

value  (immediate  deliveries  exempt)  ...  $0.01 

promissory  note  and  renewal,  on  each  $100.  .02 
express  and  freight :  Bill  of  lading  required 

when  over  five  cents :  For  each  shipment.  .  01 
telegraph  and  telephone:    On  each  message 
costing  15  cents  or  more,  tax  to  be  paid  in 

addition  to  the  tariff .01 

bond  of  indemnity ;  any  bond .50 

certificate  of  profits,  corporate,  on  each  $100  .  02 

certificate  of  damage  and  maritime .25 

certificate,  every  other  required  by  law ....  .10 
broker's  note  or  memorandum  of  sale,  any 

kind .10 

conveyance  or  deed,  on  value  of  the  equity 

of  redemption,  from  $100  to  $500 ,50 

each  additional  $500  or  fraction .50 

«ntry,   custom   house,    for   consumption   or 
warehousing : 

not  exceeding  $100  of  value ^25 

value,  $100  to  $500 .50 

value  exceeding  $500 1 .  00 

entry,    customs    bonded    warehouse    with- 
drawal   .50 

insurance,    except   life,    personal    accident, 
health,  workmen's,  and  co-operative : 
on  every  dollar  of  premium,  original  or 

renewal .  00^4 

passage  ticket  sold  in  TJ.  S.  for  abroad: 

costing  $10  or  less exempt 

costing  $30  or  less 1 .00 


SUMMARY  TABLE  OF  TAXES.  139 

costing  $30  to  $60 $3 .00 

costing  more  than  $60 5 .  00 

proxy  for  company  meeting .10 

power   of   attorney .25 

protest .25 

parlor  car  seat .01 

sleeping  car  berth .01 

Schedule  B.    Mercantile: 

Perfumery,  cosmetics,  etc.,  see  p.  106. 

every  package  retailing  at  5  cents  or  less .  .  .  001/^ 

every  package  above  5  cents,  not  above  10 

cents 0014 

every  package  above  10  cents,  not  above  15 

cents .  00% 

every  package  above  15  cents,  not  above  25 

cents 00% 

every  package  each  additional  25  cents  of 

price .  00% 

chewing  gum  or  substitutes: 

every  package  not  exceeding  $1.00  retail 

value .04 

every  package  above  $1.00  for  each  $1.00 

or  part .04 


TABLE  OF  CASES. 


TABLE  OF  CASES. 


A. 

Abraham  v.  Dubois,  4  Campb.  269 64 

Abrast  Realty  v.  Maxwell,  206  Fed.  Rep.  333 46,  117 

Adams  v.  Dale,  29  Ind.  273 49,     54 

Adams  Exp.  Co.  v.  N.  Y.,  232  U.  S.  14 25 

Agnew  V.  Haynes,  141  Fed.  Rep.  631 115 

Aiken  v.  Blaisdell,  41  Vt.  655 25 

Ambrosini  v.  U.  S.,  187  U.  S.  1 97 

American  Exp.  v.  Mich.,  177  U.  S.  404 93,    94 

Americ.  Sugar  Ref.  Co.  v.  La.,  179  U.  S.  89 23 

Amer.  Twine  Co.  v.  Worthington,  141  U.  S.  468 122. 

Amos-Richia  Co.  v.  N.  W.  Mut.  L.,  143  Mich.  684 66 

Anderson  v.  42  Broadway,  213  Fed.  Rep.  777 xxvl 

Anderson  v.  Newhall,  161  Fed.  Rep.  906 127 

Armour  Packg.  Co.  v.  Lacy,  200  U.  S.  226 23 

Armstrong  v.  Toler,  11  Wheat.  258 115 

Ashling  V.  Boon,  1  Ch.  568.  56. 

Atlantic,  etc.,  Co.  v.  Savannah,  133  Ga.  66 4S. 


B. 

Bailey  v.  Clark,  21  Wall.  284,  12  Blatchf.  156 27 

Baker  v.  Baker,  6  Lansing,  509 63 

Ballard  v.  Burnside,  49  Barb.  102 47,  54,  93 

Barbour  v.  Gates,  43  N.  Y.  40 66 

Barney  v.  Ivins,  22  Iowa,  163 101 

Bates  V.  Mobile,  46  Ala.  158 26 

Bathe  v.  Taylor,  15  East.  412 47 

Bayly  v.  McKnight,  19  La.  Ann.  321 47 

Becker,  In  re,  21  I.  R.  R.  243 ;  Fed.  Cas.  1208 112 , 

Beckwith  v.  Bonner,  6  Carrington  &  P.  681 56 

[143] 


144  TABLE  OF  CASES. 

(References  are  to  Pages.) 

Beebe  v.  Hutton,  47  Barb.  187 65 

Bennison  v.  Jewison,  12  Jur.  485 64 

Benziger  v.  U.  S.  192  U.  S.  38 122 

Bettman  v.  Warwick,  108  Fed.  Rep.  46 123 

Black  V.  6th  Ave.  R.  R.,  1  Daly,  536 109 

Blackford  v.  State,  8  Heisk.  538 35 

Blacklock  V.  U.  S.,  208  U.  S.  75 113 

Blake  v.  Natl.  Banks,  23  Wall.  307 125 

Blunt  V.  Bates,  40  Ala.  470 55 

Boske  V.  Comingore,  177  U.  S.  459 xiv 

Bowker  v.  Goodwin,  7  Nev.  135 47 

Boyd  V.  Hood,  57  Pa.  98 47,  122 

Boyd  V.  U.  S.,  116  U.  S.  617 112 

Bradley  v.  Richmond,  227  U.  S.  477 25 

Braun  v.  Chicago.  110  111.  186 35 

Ex  rel.  Brewing  Co.  v.  Fromme,  35  App.  Div.  459 66,  68 

British  India  Co.  v.  Com'rs  Int.  Rev.,  7  Q.  B.  D.  165 90 

Brown  v.  Goodwin,  75  N.  Y.  409 114 

Brown  v.  Kinney,  128  Fed.  Rep.  310 125 

Brown  v.  Watts,  1  Taunt.  353 62 

Browne  v.  Bennett,  24  La.  Ann.  618 54 

Browning  v.  Waycross,  U.  S.  S.  C.  Oct.  1913 24 

Bryan  v.  1st  Nat.  Bk.,  205  Pa.  7 56,  66 

Buckalew  v.  U.  S.,  102  Fed.  Rep.  320 102 

Buckley  v.  Hamason,  50  Minn.  195 25 

Bufflngton  v.  Day,  11  Wall.  113 66 

Burrough  v.  Abel,  105  Fed.  Rep.  366 118 

0. 

Cabbott  V.  Radford,  17  Minn.  320 56 

Campau  v.  Lewis,  3  Wall.  106 47 

Campbell  v.  U.  S.,  107  U.  S.  407 xiv,  110 

Campbell  v.  Wilcox,  10  Wall.  421 62 

Cardell  v.  Bridge,  9  Allen,  355 98 

Cardinal  v.  Smith,  Deady,  197 xiv,  78 

Cargill  Co.  v.  Minn.,  180  U.  S.  452 23 

Carpenter  v.  Johnson,  1  Nev.  331 65 


TABLE   OF  CASES.  I45 

(References  are  to  Pages.) 

Carroll  v.  Mayor,  12  Ala.  173 24 

Cassidy  v.  St.  Germain,  22  R.  I.  53 66 

Cedar  Rapids  Co.  v.  Stewart,  25  Iowa,  115 54 

Celley  v.  Gray,  37  Vt.  136 122 

Cent.  Trust  v.  C.  H.  V.  &  T.,  92  Fed.  Rep.  919 100 

Central  Trust  v.  Treat,  171  Fed.  Rep.  301,  185  id.  760 28 

In  re  Chadwick,  1  Lowell,  439 28,  112 

Chartiers  Co.  v.  McNamara,  72  Pa.  278 65 

Cheatham  v.  U.  S.,  92  U.  S.  85 118 

Chervet  v.  Jones,  6  Mad.  267 56 

Cheseborough  v.  U.  S.,  192  U.  S.  253 117,  119,  127 

Chic.  Wil.  &  St.  P.  V.  U.  S.,  127  U.  S.  406 120 

Christie-Street  Co.  v.  U.  S.,  129  Fed.  Rep.  506 xiv,  115,  118 

Citizens'  Teleph.  v.  Fuller,  229  U.  S.  322 25 

Ex  parte  City,  re  Knox,  64  Ala.  463 24 

City  of  Topeka  v.  Jones,  74  Kan.  164 95 

Clark  V.  Bailey,  12  Blatchf.  156,  21  WalL  284 28 

Clark  V.  Gilbert,  5  Blatchf.  330 30 

Clemens  v.  Conrad,  19  Mich.  170 66 

Cliquot's  Champagne,  3  Wall.  114 120 

Ex  rel.  Cohn  v.  Miller,  180  N.  Y.  16 90 

Collins  V.  N.  H.,  171  U.  S.  30 xxv 

Com'rs  Louisville  v.  Buckner,  48  Fed.  Rep.  533 118 

Commonwealth  v.  Cusick,  120  Mass.  183 121 

Commonwealth  v.  Holbrook,  10  Alien,  200 24 

Commonwealth  v.  Sloan,  4  Cush.  52 116 

Cook  V.  Marshall  County,  196  U.  S.  261 23 

Cooke  V.  England,  27  Md,  14 66 

Coopersville  Co.  v.  Lemon,  163  Fed.  Rep.  145 xxv,  116 

CoppernoU  v.  Ketcham,  56  Barb.  Ill 63 

Coppock  V.  Bower,  4  M.  &  W.  36 56 

Corbin  v.  Tracy.  34  Conn.  325 65 

Cornell  v.  Coyne,  192  U.  S.  418 xxv 

Corporation  Tax  Cases,  200  U.  S.  107 xxvi 

Corrie  v.  Billin,  23  La.  Ann.  250 61 

Craft  V.  Schafer,  153  Fed.  Rep.  175 119 

Crawford  v.  Hubbell,  89  Fed.  Rep.  961,  177  U.  S.  419 94 

Crocker  v.  Foley,  13  Allen,  376 47 

Cuzner  v.  Calif.  Club,  155  Cal.  303 45 


146  TABLE  OF  CASES. 

(References   are  to  Pages.) 

D. 

Davis  V.  Daugherty,  105  Fed.  Rep.  769 3 

Davis  V.  Ricliardson,  45  Miss.  499 6& 

Davis  V.  Williams,  13  East.  232 ' 47 

Day  V.  Barker,  36  Mo.  125 65 

De  Bary  v.  Dunne,  172  Fed.  Rep.  940 26,  32,  120 

De  Bary  v.  Souer,  101  Fed.  Rep.  425 23 

Delorme  v.  Ferk,  24  Wis.  201 70,  101 

Desmond  v.  Norris,  10  Allen,  250 54 

Dinsmore  v.  South.  Exp.,  92  Fed.  Rep.  714;  102  id.  794;  183 

U.  S.  115.  .  .    94 

Doe  V.  Amos,  2  M.  &  R.  180 122,  123 

Doffin  V.  Guyer,  39  Ind.  215 54 

Doll  V.  Evans,  15  Int.  R.  R.  143 114 

Dollar  Sav.  Bk.  v.  U.  S.,  19  Wall.  227 28,  121 

Dorris  v.  Grace,  24  Ark.  326 6& 

Dougherty  v.  U.  S.  181  U.  S.  622 123 

Dowell  v.  Applegate,  7  Fed.  Rep.  881 54 

Downes  v.  Bidwell,  182  U.  S.  244 125 


£. 

Eagle  V.  Nowlin,  94  Fed.  Rep.  646 116 

Easterbrook  v.  Heb.  L.  Orph.  Soc,  85  Conn.  289 45 

Eidman  v.  Martinez,  184  U.  S.  578 xxvi,  120 

Eidman  v.  Tilghman,  136  Fed.  Rep.  141 125 

Eldredge  v.  Ward,  155  Fed.  Rep.  253,  174  id.  402 91 

Eliot  V.  Freeman,  220  U.  S.  178,  55  L.  Ed.  424 xxvi 

Ellis  V.  State,  5  Ga.  App.  615 46 

Emery  v.  Hobson,  63  Me.  33 63 


F. 

Fairbank  v.  U.  S.,  181  U.  S.  283 .xiii,  95,  118,  121 

Farmers'  L.  &  T.  v.  Council  Bluffs  Co.,  90  Fed.  Rep.  806 100 

Farmers'  L.  &  T.  v.  Treat,  171  Fed.  Rep.  302,  185  id.  760-    . .     28 
Felton  v.  U.  S..  96  U.  S.  699 116 


TABLE  OF  CASES.  147 

(References  are  to   Pages.) 

Fish  V.  Cottenet,  44  N.  Y.  538 62 

Fisher  v.  Leslie,  1  Esp.  426 93 

Flaherty  v.  Hanson,  215  U.  S.  515 25 

Fleshman  v.  McClain,  105  Fed.  Rep.  610,  106  id.  880 91,  99,  115 

Flint  V.  Stone  Tracy  Co.,  220  U.  S.  107 46,  xxvi,  12a 

Foster  v.  HoUey's  Admin.,  49  Ala.  593 54 

14  Diamond  Rings  v.  U.  S.,  183  U.  S.  176 127 

Freeman  v.  U.  S.,  157  Fed.  Rep,  195 119 

Frink  v.  Thompson,  4  Lansing,  489 63 


a. 

Garland  v.  Lane,  46  N.  H.  245 56 

Germ.  Sav.  Bk.  v.  Archbold,  15  Blatch.  398 77,  114 

Govern  v.  Littlefield,  13  Allen,  127 63 

In  re  Grace,  75  Fed.  Rep.  2 109 

Grace  v.  Collector,  79  Fed.  Rep.  315 109 

Granby  Mercantile  Co.  v.  Webster,  98  Fed.  Rep.  604 48 

Grand  v.  Cox,  24  La.  Ann.  462 62 

Gray  v.  W.  U.  T.  Co.,  85  Mo.  App.  123 95 

Green  v.  Holway,  lOl  Mass.  243 62,    66 

Green  v.  Lowry,  38  Ga.  548 56 

Gregory  v.  Fraser,  3  Camp.  454 56 

Gundling  v.  Chicago,  177  U.  S.  183 25 

Gunter  v.  Lecky,  30  Ala.  591 24 

Gurr  V.  Scudds,  11  Exch.  R.  (H.  &  G.)  190 122,  123 


H. 

Haight  &  F.  v.  McCoach.  135  Fed.  Rep.  894 119 

Hall  V.  Bishop,  3  Daly,  109 25 

Hall   V.  Jordan,  19  Wall.   271 100 

Halock  V.  Jaudin,  34  Cal.  167 56,     63 

Hammond  Packing  Co.  v.  Montana,  233  U.  S.  331 xxiv 

Harper  v.  Clark,  17  Ohio  St.  190 63 

Hartranft  v.  Wiegmann,  121  U.  S.  609 122,  123 

Hatch  V.   Reardon,    110   App.   Div.   821;    184   N.  Y.  431;    204 
U.    S.   152 90 


148  TABLE  OF  CASES. 

(References  are  to  Pages.) 

Haymes  v.  Brown,  132  Fed.  Rep.  525 115 

Head  Money  Cases,  112  U.  S.  580 xxvii 

Herold  v.  Kahn,  159  Fed.  Rep.  608 117 

Herrick  v.  Malin,  22  Wend.  388 47 

Hertz  V.  Woodman,  218  U.  S.  205 xxvi,  125 

High  V.  Coyne,  93  Fed.  Rep.  450;  178  U.  S.  Ill xxvi 

Hirshi  V.  Commonwealth,  21  Gratt.  785 xiv 

Hitchcoclc  V.   Sawyer,  39   Vt.  412 63 

Jlolman  v.  Johnson,  1  Cowper,  341 47 

Holt  V.  Green,  73  Pa.  200 25 

Holyoke  Co.  v.  Franklin  Co.,  97  Mass.  150 63 

Hooper  v.  Calif.,  155  U.  S.   648 23 

Hoops  V.  Atkins,  41  Ga.  109 93 

Hoppock  V.  Plato,  30  How.  Pr.  120 68 

Howe  V.  Carpenter,  53  Barb.  382 63 

Hugus  V.  Strickler,  19  Iowa,  413 121,  122 

In  re  Huttman,  70  Fed.  Rep.  699 xlr 


I. 

Income  Tax  Cases,  157  U.  S.  429 ;  158  id.  601 xxvi,  xxviii,  128 


J. 

Jackson  v.  Hough,  38  W.  Va.  237 30,    33 

Jacquin   v.   Warren,   90   111.   459 62,    93 

James  v.  Appel,  192  U.  S.  129 121 

James  v.  Blauvelt,  Fed.  Cas.  7180 101 

James  v.  Catherwood.  3  Bowling  &  R.  190 47 

James  v.  Hicks,  110  U.  S.  272 117 

Johnson  v.  Herold,  161  Fed.  Rep.  593 117 

Jones  v.  Jones,  38  Cal.  584 93 

Jordan  v.  Roche,  228  U.  S.  436 , .  125 

E. 

Kaufman  v.  U.  S.,  113  Fed.  Rep.  919 53 

Kawailani,  The,  128  Fed.  Rep.  879 127 


TABLE  OF  CASES.  14^ 

(References  are  to  Pages.) 

Kershaw  v.  Cox,  3  Esp.  N.  P.  C.  246 47 

Kings  Co.  Sav.  Inst.  v.  Blair,  116  U.  S.  200 118 

In   re  Kinney,   102  Fed.   Rep.   468 28,  112 

Kirk  V.  W.  U.  T.  Co.,  90  Fed.  Rep.  809 95 

Klock  Produce  Co.  v.  Hartson,  212  Fed.  Rep.  758 118 

Knill  V.  Williams,  10  East.  431 47 

Knowlton  v.  Moore,  178  U.  S.  41 xxvi 

Re  Knox,  ex  parte  City,  64  Ala.  463 24 

Knox  V.  Rossi,  25  Nev.  96 66 

Knox  V.  Hindepoper,  21  Wis.  527 65 

In  re  Kollock,  165  U.  S.  526 liv 

Kreiss  v.  Seligman,  8  Barb.  439 115 


L. 

Laird  v.  State,  61  Md.  309 93 

In  re  Lamberton,  124  Fed.  Rep.  446 xiv 

Landram  v.  U.  S.,  16  Ct.  Cls.  74 28 

Land  Title  &  T.  v.  McCoach,  127  Fed.  Rep.  386 125 

Larned  v.  Andrews,  106  Mass.  435 25 

Latham   v.   Smith,  45  111.   29 66 

Lawrence  v.  Seyburn,  202  Fed.  Rep.  913 xxv 

Leather  Mfrs.  Bk.  v.  Treat,  116  Fed.  Rep.  774;  128  id.  262..  28 

Ledbetter  v.  U.  S.,  170  U.  S.  610 26 

Lees  V.  U.  S.,  150  U.  S.  476 114 

Lewis  V.  Campau,  3  Wall.  106 101 

License  Tax  Cases,  5  Wall.  462 23,  24,  123 

Linton  v.  Natl.  L.  I.  Co.,  104  Fed.  Rep.  584 104 

In  re  Lippmann,  3  Ben.  95 28,  29 

Ludlow  V.  Van  Rensselaer,  1  Johns.  R.  96 47 


M. 

McAfferty  v.  Hale,  24  Iowa,  355 61 

McBride  v.   Doty,    23    Iowa,    122 62,     68 

McClain  v.  Merchants,  112  Fed.  Rep.  787;  115  id.  295 48 

McClain  v.  Penna.  etc.,  Co.,  108  Fed.  Rep.  618 xiii,  121 

McCoach  V.  Minehill,  etc.,  Co.,  228  U.  S.  295 46,  xxvi 


,150  TABLE  OF  CASES. 

(References  are  to  Pages.) 

McCray  v.  U.  S.,  195  U.  S.  27;  49  L.  Ed.  78 xxiv 

McCulloch  V.  Md.,  4  Wheaton,  316 xxvii 

In  re  McDonough,  49  Fed.  Rep.  3G2 3 

McGuire  v.  Commonwealth,  3  Wall.  387 24 

McLearn  v.  Skelton,  18  La.  Ann.  514 47 

McNally  v.  Field,  119  Fed.  Rep.  445 xiii,  70,  96,  97,  122 

Mansfield  v.  Excelsior  R.  Co.,  135  U.  S.  326 113 

Marks  v.  U.  S.,  196  Fed.  Rep.  476 xlv,  xxiv 

Mastin  v.  Mastin,  99  Fed.  Rep.  435 101 

Mechanics'  Bk.  v.  Townsend,  5  Blatchf.  315 27 

Mercer  v.  Mercer,  29  Iowa,  557 47,  56,     101 

In  re  Mdse.  Imported,  Holt,  75  Fed.  Rep.  998 109,  121 

Mchts'  Nat.  Bk.  v.  U.  S.,  42  Ct.  Cls.  6 27 

Mchts'  Warehouse  v.  McClain,  112  Fed.  Rep.  787 48 

Merck  v.  Treat,  202  Fed.  Rep.  133 118 

Merritt  v.  Cameron,  137  U.  S.  542 xiii 

Metropol.  Exch.  v.  Gill,  199  Fed.  Rep.  545 91 

Miller  v.  Peo.,  52  N.  Y.  304 93 

Miner  v.  Fredonia,  27  N.  Y.  155 26 

Mobile,  etc.,  R.  Co.  v.  Edwards,  46  Ala.  267 61 

Moore  v.  Moore,  47  N.   Y.  467 61,  66,  101 

Moore  v.  Quick,   105   Mass.   49 66 

Morley  v.  Hall,  2  Dowl.  494 122 

Morris  v.  McMorris,  44  Miss.  441 63 

Moxley  v.  Hertz,  216  U.  S.  344 xxiv 

Munic.  Tel.,  etc.,  Co.  v.  Ward,  133  Fed.  Rep.  70 91 

Mutheson  &  Co.  v.  U.  S.,  71  Fed.  Rep.  394 122 

Myers  v.  Smith,  48  Barb.  614 49,  54,  61.     66 

N. 

Nat.  Bk.  Commerce  v.  Allen,  211  Fed.  Rep.  743 xxvi 

Nave  v.  King,  27  Md.  356 70 

Newhall  v.  Jordan,  149  Fed.  Rep.  586;  160  id.  661 127 

N«w  Haven,  etc.,  Co.  v.  Quintard,  31  How.  Pr.  N.  Y.  29..        62, 

63,  66,  122 

New  Orleans  v.  Metrop.  Loan,  31  La.  Ann.  310 29,    34 

N.  Y.  &  Cuba  Mail  v.  U.  S.,  125  Fed.  Rep.   320;   200  U.  S. 
488 95,  117 


TABLE  OF  CASES.  151 

(References  are  to  Pages.) 

N,  Y.  Teleph.  Co.  v.  Treat,  130  Fed.  Rep.  340 96,  122 

Nicol  V.  Ames,  89  Fed.  Rep.  144;  173  U.  S.  509 91,  123 

Noble  V.  Citizens  Bk.,  63  Neb.  847 70,    98 

Northrup  v.  Shook,  10  Blatchf.  243 33 


0. 

Ohio  Tax  Cases,  232  U.  S.  576 25 

Ohio  V.  Kendle,  8  O.  N.  P.  N.  S.  109 24 

Oregon,  etc..  Trust  v.  Rathbun,  5  Sawyer,  32 28 

Orford  v.  Cole,  2  Starkie,  351 47 

Oulton  V.  Sav.  Inst.,  17  Wall.  118 27 

Owen  V.  Thomas,  3  Mylne  &  K.  353 56,  63 

Oxford  Iron  Co.  v.  Spradley,  51  Ala.  171 63 

P. 

Pacif  Ins.  Co.  v.  Soule,  7  Wall.  433 123 

Park  &  Tilford  v.  U.  S.,  66  Fed.  Rep.  731 109 

Patterson  v.  Eames,  54  Me.  203 65 

Patterson  v.  Gile,  1  Col.  T.  200 54 

Patton  V.  Brady,  184  U.  S.  608 3,  43,  123,  124 

Peck  V.  Kinney,  128  Fed.  Rep.  313 125 

Penn.  Co.  for  Ins.  v.  McClain,  105  Fed.  Rep.  367,  106  id.  618. .   118 

Penna.  Steel  v.  N.  Y.  City.  Ry.,  198  Fed.  Rep.  774 xxvi 

Peo.  V.  Fromme,  35  App.  Div.  N.  Y,  459 66,     68 

Peo.  ex  rel.  Cohn  v.  Miller,  180  N.  Y.  16 90 

Pepke  V.  U.  S.,  183  U.  S.  176 127 

Pervear  v.  Commonwealth,  5  Wall.  475 24 

Phila.  Trust  v.  McCoach,  127  Fed.  Rep.  126 125 

Pierpont  v.  Johnson,  104  111.  App.  27 66 

Pilcher  v.  U.  S.,  113  Fed.  Rep.  248 75 

Plessinger  v.  Dupuy,  25  Ind.  419 65 

Plumley  v.  Mass.,  155  U.  S.  461 24 

Pollard  V.  Phoenix  Ins.  Co.,  63  Miss.  244 25 

Pollock  V.  Farmers'  L.  &  T.,  157  U.  S.  429,  158  id.  601 xxvi 

xxviii,  123 
Ponce  V.  R.  C.  Church,  210  U.  S.  296 127 


152  TABLE  OF  CASES. 

(References  are  to  Pages.) 

Portland  v.  O'Neill,  1  Oreg.  218 24 

Pounds  V.  U.  S..  171  U.  S.  35 75 

Powell  V.  Penna.,  127  U.  S.  678 xxv 

Powers  V.  Barney,  5  Blatch.  202 123 

Prather  v.  Pritchard,  26  Ind.  65 70,  98 

Prather  v.  Tulauf ,  38  Ind.  155 56 

Pugh  V.  McCormick,  14  Wall.  361 64,  93 

Pullan  V.  Kinsinger,  2  Abb.  U.  S.  94 xiii 

Q. 

In  re  Quantity  Spirits,  3  Ben.  552,  Fed.  Cas.  11495 116 

R. 

Real  Est.  Bk.  v.  U.  S.,  16  Ct.  Cls.  335 117 

Ex  parte  Reed,  100  U.  S.  13 xiv 

Reed  v.  Deere,  7  Barn.  &  Q.  261 47 

Rees  V.  Jackson,  64  Pa.  486 54 

Rex  V.  Hawkeswood,  1  Leach  Cro.  Ca.  257 63 

Rex  V.  Preston,  3  N.  &  M.  31 64 

Rice  &  Co.  V.  U.  S.,  53  Fed.  Rep.  910 122 

Richards  v.  Frankum,  9  Carr.  &  P.  221 93 

Richmond  v.  Blake,  132  U.  S.  592 27 

Rippiner  v.  Wright,  2  B.  &  Aid.  479 62 

Robards  Tobacco  Co.  v.  Franks,  103  Fed.  Rep.  276,  112  id. 

784 xii,  123 

Robertson  v.  U.  S.,  220  U.  S.  616 xxvi 

Robbins  v.  Shelby  Co.,  120  U.  S.  489 36 

Roche  V.  Jordan,  175  Fed.  Rep.  234,  228  U.  S.  436 125 

Rowe  V.  Bowman,  183  Mass.  488 62 

Ruckman  v.  Bergholz,  37  N.  J.  L.  437 25 

s. 

Sackett  v.  McCaffrey,  131  Fed.  Rep.  219 66,  70,  98 

St.  Louis  V.  Laughlin,  49  Mo.  559 24 

St.  Paul,  etc.,  Ry.  Co.  v.  Phelps,  137  U.  S.  528 xiii 

Sarlls  V.  U.  S.,  152  U.  S.  570 3 


TABLE  OF  CASES.  15 3. 

(References  are  to  Pages.) 

Sault  Ste.  Marie  v.  Internat.  Transit,  U.  S.  S.  C.  Oct.  1913 24 

Sayles  v.  Davis,  22  Wis.  225 70 

Schell's  Extrs  v.  Fauche,  138  U.  S.  562 xiii 

Schermerhorn  v.  Burgess,  55  Barb.  422 61 

Schollenberger  v.  Pa.,  171  U.  S.  1 xxv 

Selden  v.  Equitable  Trust.  94  U.  S.  419 27,     28 

Sesnon  v.  U.  S.,  182  Fed.  Rep.  573,  220  U.  S.  609 23,  120 

Shelley  v.  U.  S.,  198  Fed.  Rep.  88 xxiv 

Sheridan  v.  Allen,  153  Fed.  Rep.  568 113 

Sime  V.  Howard,  4  Nev.  473 101 

Simmons  v.  State,  12  Mo.  268 24 

Simpson  v.  Peaslee,  20  How.  571 127 

Simpson  v.  Treat,  126  Fed.  Rep.  1003 94,     99 

Slack  V.  Tucker,  1  Holmes,  485,  23  Wall.  321 34,     39 

Small  V.  Slocumb,  112  Ga.  279 66 

Smith  V.  Mawhood,  14  M.  &  W.  452 25 

Smith  V.  Waters,  25  Ind.  397 121 

Smythe  v.  Fiske,  23  Wall.  374 xiii,  120,  123 

Snyder  v.  Marks,  109  U.  S.  189 xiii,  118 

South  Carolina  v.  U.  S.,  199  U.  S.  437 71,  124 

South.  Exp.  V.  Rose  Co.,  124  Ga.  581     95 

Southern  Oil  Co.  v.  Texas,  217  U.  S.  114 23 

Sperry  v.  Horr,  32  Iowa,  184 55 

Spielman  v.  State.  27  Md.  520 26 

Spooner  v.  Eifler,  1  Heisk.  633 66 

Spreckles  v.  McClain,  109  Fed.  Rep.  76,  113  id.  244... xiv,  113,  123 

Springer  v.  U.  S.,  102  U.  S.  586 xii,  123 

Stan  wood  v.  Green,  2  Abb.  U.  S.  184 29 

State  V.  Delano,  54  Me.  501 24 

State  V.  Duncan,  16  Lea,  75 33 

State  V.  Field,  49  Mo.   270 35 

State  V.   Garton,  32   Ind.   1 70 

State  V.  Hill,  30  Wis.  416 63,     93 

State  V.  Johnson,  65  Me.  362 24 

State  V.  Mott,  16  Minn.  472 93 

State  R.  R.  Tax  Cases,  92  U.  S.  575 xii 

Steele  v.  Spencer,  1  Peters,  552 47 

Stirneman  v.  Smith,  100  Fed.  Rep.  600 70,     98 

Stockdale  v.  Doswell,  16  Wall.  156 35 

Stockdale  v.  Insur.  Cos.,  20  Wall.  323 125 


154  TABLE  OF  CASES. 

(References  are  to  Pages.) 

In  re  Strouse,  1   Sawyer,   605 29 

Sulpho  Bath  Co.  v.  Allen,  66  Neb.  295 66 

Swift  Co.  V.  U.  S.,  Ill  U.  S.  22 118 

T. 

Taylor  v.  Duncan,  33  Tex.  440 54 

Taylor  v.  U.  S,.  3  How.  U.  S.  197 120 

Teagarden  v.  Garver,  24  Ind.  399 49 

Tedrick  v.  Hiner,  16  111.  189 25 

The  Kawailani,  128  Fed.  Rep.  879 127 

Thomas  v.  Texas,  40  Tex.  Crlm.  App.  279 47,  66,  93 

Thomas  v.  U.  S.,  192  U.  S..  363,  115  Fed.  Rep.  207 90,  123 

Tobey  v.  Chipman,  95  Mass.  123 56,  65 

Tolman  v.  Treat,  106  Fed.  Rep.  679,  113  id.  892 104 

Tomlin   v.  Woods,  125   Iowa,  367 66 

Topeka  v.  Jones,  74  Kan.  164 95 

Treat  v.  Tolman,  106  Fed.  Rep.  679,  113  id.  892 104 

Tripp  V.  Bishop,  56  Pa.  424 56 

Trull  V.   Moulton,   12  Allen,  396 56 

u. 

Union,  etc.,  Assn.  v.  Neill,  31  Iowa,  95 54 

U.  S.  V.  Abbott,  9  Int.  R.  R.  186 72 

U.  S.  V.  Adams  Exp.,  119  Fed.  Rep.  240 26 

U.  S.  V.  Allen,  14  Fed.  Rep.  263 114 

U.  S.  V.  American  Tobacco,  166  U.  S.  468 119 

U.  S.  V.  Bank  of  Montreal,  21  Fed.  Rep.  236 27 

U.  S.  V.  Barnes,  222  U.  S.  513 121 

U.  S.  V.  Bedgood,  49  Fed.  Rep.  54 113 

U.  S.  V.  Black,  11  Blatchf.  U.  S.  543,  128  U.  S.  40 xiii 

U.  S.  V.  Breed,  24  Fed.  Cas.  1222,  No.  14638 120 

U.  S.  V.  Brown,  119  Fed.  Rep.  482 53,    54 

U.   S.  V.  Brown,  Deady,  566 109 

U.  S.  V.  Buzzo,  18  Wall.  125 63,  116 

U.  S.  V.  Chamberlain,  219  U.  S.  250 60,  111,  115 

U.  S.  V.  Chevallier,  102  Fed.  Rep.  107  id.  434 26,    32 

U.  S.  V.  Chouteau,  102  U.  S.  603 114 

U.  S.  V.  Clawson  119  Fed.  Rep.  994 91 


TABLE  OF  CASES.  155 

(References  are  to  Pages.) 

U.  S.  V.  Cole,  134  Fed.  Rep.  697 xiii,  115,  120 

U.  S.  V.  Craft,  43  Fed.  Rep.  374 114 

U.  S.  V.  Cutting,  3  Wall.  441 30 

U.  S.  V.  Davis,  37  Fed.  Rep.  468 26 

U.  S.  V.  Devlin,  6  Blatchf.  71 115 

U.  S.  V.  Don  Kee,  192  Fed.  Rep.  733 xxiv 

U.  S.  V.  Eaton,  144  U.  S.  677 xiv,  115 

U.  S.  V.  Edwards,  43  Fed.  Rep.  67 113 

U.  S.  V.  11150  Lbs.  Butter,  188  Fed.  Rep.  157,  195  id.  657..xxv,  116 

U.  S.  V.  Farmers'  L.  &  T.,  25  Fed.  Cas.  No.  15070 27 

U.  S.  V.  Fidelity  Trust,  222  U.  S.  158 118 

U.  S.   V.  Fisk,   3   Wall.    445 31 

U.  S.  V.  Foster,  2  Biss.  453 114 

U.  S.  V.  Gallant,  117  Fed.  Rep.  281 116 

U.  S.  V.  Glab,  99  U.  S.  225 26 

U.  S.  V.  Goldback,  102  U.  S.  623 57,     79 

TJ.  S.  V.  Gooding,  12  Wheat.  460 122 

U.  S.  V.  Griswold,  7  Saw.  311 100 

U.  S.  V.  Halberstadt,  Gilp.  262,  Fed.  Cas.  15276. 117 

U.  S.  V.  Hall,  131  U.  S.  50 113 

U.  S.  V.  Hardison,  135  Fed.  Rep.  419 113 

U.  S.  V.  Hill,  120  U.  S.  169 xlil 

U.  S.  V.  Hodson,  10  Wall.  395 120,  123 

U.  5.  V.  Howard,  1  Sawyer,  507 38 

U.  S.  V.  Hyams,  146  Fed.  Rep.  15;  139  id.  997 110 

TJ.  S.  V.  Isham,  17  Wall.  496 48,   122,  123 

U.  S.  V.  Jackson,  1  Hughes,  531 26 

U.  S.  V.  Kaufman,  96  U.  S.  567 26 

U.  S.  V.  Kenton,  2  Bond,  87 35 

U.  S.  V.  Keyes,  10  Fed.  Rep.  876 '. .     48 

II.  S.  V.  Lamson,  165  Fed.  Rep.  80 113 

U.  S.  V.  Liquor  Dealers,  156  Fed.  Rep.  219 116 

U.  S.  V.  McGuinniss,  1  Abb.  U.  S.  120 117 

U.  S.  V.  Montjoy,  3  Int.  Rev.  R.,  Fed.  Cas.  15678 117 

TJ.  S.  V.  Moore,  11  Fed.  Rep.  248 72 

TJ.  S.  V.  Morin,  4  Biss.  93 114 

TJ.  S.  V.  Mullins,  119  Fed.  Rep.  334 122 

TJ.  S.  V.  Neustaedter,  149  Fed.  Rep.  1010 xxvl 

U.   S.  V.  N.  Y.  &  Cuba  Mall,  200  U.  S.  488;    125  Fed.  Rep. 
320;    50  L.  Ed.  569 95,  117 


156  TABLE  OF  CASES. 

(References  are  to  Pages.) 

U.  S.  V.  Olney,  1  Abb.  U.  S.  275 122 

U.  S.  V.  One  Black  Horse,  129  Fed.  Rep.  167 114 

U.  S.  V.  Owens,  100  Fed.  Rep.  70 70,  97 

U.  S.  V.  Pounds,  171  U.  S.  35 75 

U.  S.  V.  Priest,  210  Fed.  Rep.  332 118 

U.  S.  V.  Reisinger,  128  U.  S.  398 125 

U.  S.  V.  Rennecke,  28  Fed.  Rep.  847 26,  45 

U.  S.  V.  Riley,  5  Blatchf.  204 24 

U.  S.  V.  Rogers,  164  Fed.  Rep.  520 116 

U.  S.  V.  Sav.  Bk.,  104  U.  S.  728 xui,  117,  118 

U.  S.  V.  7  Bbls.  Whisky,  131  Fed.  Rep.  806 115 

U.  S.  V.  Simons,  1  Abb.  470 35 

U.  S.  V.  3  Stills,  47  Fed.  Rep.  495 75 

U.  S.  V.  Stowell,  133  U.  S.  1 120 

U.  S.  V.  Symonds,  120  U.  S.  46 xiv 

U.  S.  V.  Sykes,  58  Fed.  Rep.  1000 48,  114 

U.  S.  V.  Thomas,  115  Fed.  Rep.  207 ;  192  U.  S.  363 45,  9a 

U.  S.  V.  Thomasson,  4  Biss.  99 116 

U.  S.  V.  20  Boxes,  123  Fed.  Rep.  135;  133  id.  910 122 

U.  S.  V.  Two  Barrels  Whisky,  96  Fed.  Rep.  479 114 

U.  S.  V.  200  Barrels,  95  U.  S.  571 xiv 

U.  S.  V.  246 1/2  Lbs.  Tobacco,  103  Fed.  Rep.  791 120 

U.  S.  V.  237  Boxes,  6  Ben.  543 75 

U.  S.  V.  Union  Pacif.,  91  U.  S.  72 122 

U.  S.  V.  Van  Slyke,  8  Biss.  227 36 

U.  S.  V.  Vinson,  8  Fed.  Rep.  507 44 

U.  S.  V.  Walsh,  1  Abb.  U.  S.  66 72 

U.  S.  V.  Wong  Kim  Ark,  18  Sup  Ct.  Rep.  456 121 


V. 

Vail  V.  Knapp,  49  Barb.  299 68,  122 

Van  Deman  v.  Lewis  Co.,  214  Fed.  Rep.  827 25 

Vanderbilt  v.  Eidman,  196  U.  S.  480 xxvi,  118 

Vanderbilt  Univ.  v.  Cheney,  116  Tenn.  259 45 

Vaughan  v.  O'Brien,  39  How.  Pr.  515 55,     63 


TABLE  OF  CASES.  157 

(References  are  to  Pages.) 

Veazie  Bk.  v.  Fenno,  8  Wall.  533 xxvii 

Vermont  v.  U.  S.,  217  U.  S.  605;  54  L.  Ed.  899 xxiv 

Vorebeck  v.  Roe,  50  Barb.   302 63 


w. 

Wallace  v.  Craven,  34  Ind.  534 66 

Waring  v.  Smyth,  2  Barb.  Ch.  119 47 

Warren  v.  Shook,  91  U.  S.  704 27,  30,  32 

Warrington  v.  Furbor,  8  East.  242 122 

Warwick  v.  Bettman,  102  Fed.  Rep.  127;  108  id.  46 70,  97 

Waterbury  v.  McMillan,  46  Miss.  635 56 

Wellard  v.  Moss,  1  Blng.  134 93 

Weltner  v.  Riggs,  3  W.  Va.  445 ' 63 

Western  Exp.  Co.  v.  U.  S.,  141  Fed.  Rep.  28 26 

Western  U.  T.  v.  Winnsboro,  71  S.  C.  231 xili 

Weyman  v.  Torreyson,  4  Nev.  124 56,  62 

Wheaton  v.  Weston,  128  Fed.  Rep.  151 xiii 

White  V.  Treat,  181  U.  S.  264;  45  L.  Ed.  853 91 

Whitehill  v.  Shickle,  43  Mo.  537 63 

Wigham  v.  Pickett,  43  Ala.  140 61 

Wilkes-Barre  Co.  v.  Davis,  214  Fed.  Rep.  511 xxvi,  46 

Willey  V.  Robinson,  13  Allen,  128 47 

Williams  v.  Talladega,  226  U.  S.  404 25 

Wilson  V.  Carey,  40  Vt.  179 62 

Wilson  V.  Kennedy,  1  Esp.  245 62 

Wiltse  V.  State,  8  Heisk.  544 35 

Wingert  v.  Zeigler,  91  Md.  318 62 

Woodward  v.  Stearns,  10  Abb.  Pr.  N.  S.  395 25 

Works  V.  Hershey,  35  Iowa,  340 63 

Wright  V.  Mich.  Cent.,  130  Fed.  Rep.  843 94 


z. 

Zonne  v.  Minn.  Syndicate,  220  U.  S.  187 46 


CONDENSED  CATCH  LINE  INDEX. 

FOR  INDEX  SEE  PAGE  167. 


CONDENSED  CATCH  LINE  INDEX  TO  THE 

ACT. 


For  Index,  see  Page  167. 


(References   are  to  Pages.) 


Act  of  Oct.  22,  1914,  see  also  separate  titles. 

Adhesive  stamps, .  §  5 46 

Beer,  etc.,  §  1 1 

notes 2 

Beer  tax,  former  to  revive  Jan.  1,  1916,  §  24 124 

Bonds,  debentures,  stocks 80 

notes  on 89 

Bond,  of  indemnity,  and  others 85 

notes  on 96 

Broker's  note,  or  memo,  of  sale 86 

notes  on 99 

■Cancellation  of  stamps,  §  8.  53 

Certificates,   all   required 86 

notes  on.  .  .  98 

Certificates,  marine,  etc 86 

notes  on.  .  .  98 

Certificates  of  profits,  etc 85 

notes  on.  .  .  97 

€hewing  gum,  etc.  .   107 

notes  on.  .  .    110 

Contract  broker's  note 86 

notes  on.  .  .  99 

Conveyance,  deed,  etc 86 

notes  on 100 

[161] 


162     CONDENSED  CATCH  LINE  INDEX  TO  THE  ACT. 

(References  are  to  Pages.) 

Custom-house  entry,  for  consumption,  etc 86 

Custom-house  entry,   withdrawal   from  bond 87 

Distribution  of  stamps,  officially,  §  10 56 

Express  and  freight.  .   83 

notes  on.  .  .   93 

Exportation  of  taxable  mdse.  §  19 74 

Failure  to  stamp  papers,  penalty,  §  6 49,  58 

Forgery  and  counterfeiting  of  stamps,  §  7 50 

Governmental  papers  exempt,  §  15 69 

Imported  articles  taxed,  §  21 77 

Insurance,  all,  except  certain 87 

notes  on.   .   .    102 

Insurance,  certain  exempted 87 

notes  on.   .   .    102 

Kind  of  stamp  not  essential,  §  14 68 

Merchandise  stamps,  omission  of,  §  17 71 

Monthly  declaration  by  manufacturer  of  mdse.  §  20 75 

Occupation  taxes,  §§  3,  4 18,  39 

notes.    .   .   .    22,  43 

Other  laws  made  applicable,  §  23 110 

notes  on  collection.  .  .   Ill 

construction.  .  .  .   119 

penalties.   .   .   .    114 

protest  and  recovery.  .  .  117 

Parlor  car  or  sleeper  ticket.   89 

notes   on.   .   .    105 

Passage  tickets,  foreign.  .  88 

notes  on 103 

Perfumery  and  cosmetics.  .  . 106 

notes  on.   .   .    108 

Perfumery,  cosmetics,  etc.,  stamping,  §  17 71 

Post-stamping  of  papers,  §  11 58 

Power  of  attorney.  .  .   88 

notes  on.   .   .    104 

Promissory  notes 83 

notes  on 92" 

Promissory  note,  unstamped,  §  9. 55 


CONDENSED  CATCH  LINE  INDEX  TO  THE  ACT.     IQ'S. 
(References  are  to  Pages.) 

Protest  of  note  or  Nil.   8^ 

notes  on 104 

Proxy,  voting.  ...  88 

Recording  forbidden  until  stamped,  §  12 64 

Recording  or  registry  unlawful,  unstamped,  §  13 67 

Removal,  misuse  of  mdse.  stamps,  §  18 73 

Removal  of  unstamped  mdse.  §  19.  74 

Sales  of  products  on  exchange.   81 

notes  on 91 

Sale  of  stamps,  §  10.   57 

Schedule  A,  documentary  stamps,  §  22 80 

notes  on.  .  .   89 

Schedule  B,  merchandise  tax 106 

Special   taxes,  general,   §   3 18 

notes 22 

Special  taxes,  tobacco  dealers  and  manufacturers,  §  4 . .  39 

notes 43 

Stamp  laws  same  for  Schedules  A  and  B,  §  16 71 

Stamp  taxes  imix>sed,  §  5 46 

Stamps,  cancellation  of,  §  22 78 

Stamps,  preparation,  etc.,  §  22 78; 

Stamps,  sale,  discount,  §  22 79 

Stamps,  unused,  redemption  of,  §  24 124 

State  and  local  functions  exempt,  §  15 69 

Take  effect,  when  Act  to,   §  24 124 

Telegraph  and  telephone   84 

notes  on    95 

Tickets,  foreign  passage  88 

notes  on   103 

Tobacco,  special  taxes.  §  4 39 

notes 43 

Validity  not  affected  by  wrong  stamp,  §  14 68 

Wines,  etc.,  §  2 4-16 

notes 16 


INDEX. 


INDEX. 


(References  are  to  Pages.) 


A. 

Abatement.     See  Drawback. 

Absence  of  stamps  from  wines,  effect  of 6 

Adhesive  stamps   46 

See  Stamps. 

Administrative  rulings,  value  of xi,  xii,  xiii,  xiv,  78,  121 

where   found    xi,  xii 

Agent.     See  Broker. 

Agriculture  department  and  wine  fortification 9 

Ale.    See  Beer. 

Amendments  of  laws,  R.  S.  §  3339 2,  6  et  seq. 

Oct.  1,  1890    7 

June  7,  1906  .   14 

Appropriation  for  enforcing  Act Ill 

Armory.     See  Theatre. 

Assessment  and  collection  .  .   xxiii,  111 


B. 

Baggage,  not  taxed  94 

Bank   circulation    xxvii 

Bankers,  special  tax  on  18 

how  computed    18 

banker,  defined  18 

postal  and  savings  excepted 18 

banker  not  taxed  as  broker 19 

notes 27 

Beer  tax,  former  to  revive  Jan.  1,  1916 124,  125 

[167] 


168  INDEX. 

(References  are  to  Pages.) 

Beer,  etc.,  increased  tax  on 1,  2 

notes  on 2,  i 

Berth  in  sleeping  car.  Schedule  A 89 

Bill  of  lading,  required  and  taxed 83,  93 

Billiard  rooms,  proprietor,  special  tax 21 

notes 38 

Billiards.     See  Bowling. 

Blending  of  wines  15 

Board  of  trade,  sales  on 81,  91 

actual  deliveries  not  taxed.  Schedule  A 82 

Bond  of  fortified  wine  producer 9,  11,  14 

Bonds,  debentures,  issue  of,  taxed.  Schedule  A 80,  89 

Bonds,  corporate.  Schedule  A 80 

Bonds,  indemnity  and  others,  tax  on 85,  96 

Schedule  A 85 

Bond  of  any.  description.  Schedule  A 85 

Bowling  alleys,  proprietors,  special  tax 21 

definition  of  bowling  and  billiard  rooms 21 

notes 38 

Brewers xxiv 

Broker.     See  the  various  kinds. 

special  tax  on  19 

defined 19 

broker's  tax  not  required  of  banker 19 

Broker's  note,  or  memo,  of  sale 86,  99 

Schedule  A   • 86 

Broker,  stock,  special  tax 19 

notes 30 

Butter,  adulterated  and  renovated.  xxiv,  xxv 


c. 

Canal  Zone   26 

Cancellation  of  stamps  .  53,  54,  78 

Cards,   playing    xxvi 

Certificates,  of  any  required  kind 86,  98 

Schedule  A    86 

Certificates   of   damage,   etc 86,  98 

Schedule  A    86 


INDEX.  169 

(References  are  to  Pages.) 

Certificate  of  indebtedness,  corporate.  Schedule  A 80 

Certificate,  marine  or  port 86,  98 

Sciiedule  A    86 

Certificates  of  profit,  etc 85,  97 

Schedule  A    85 

Champagne.     See  Wines. 

tax  on    4 

Cheese,   filled    xxv 

Chewing  gum,  etc..  Schedule  B 107,  110 

Cigars xxiv 

Cigar  manufacturer,  special  tax 41 

notes 43. 

Cigarette  manufacturer,  special  tax 42 

notes 43 

Circulars.     See  Administrative  Rulings. 

Circulation,  bank   xxvii 

Circus,  proprietor  of,  special  tax 20 

defined 20 

taxed  in  every  state  visited 20 

notes 37 

Cognac.     See  Wine  Spirits. 

Collateral,  stocks  as,  not  taxed 80 

Collection  of  taxes   Ill 

Commercial  broker,  special  tax 19 

defined 19 

not  taxed  as  commission  merchant 19 

notes 34 

Commission  merchant,  special  tax 21 

defined 21 

commission  merchant  and  commission  broker  one  tax..  21 

co-operative  house  exempt  21 

notes 38 

Commissioner,  rulings  of.     See  Administrative. 

Constitutionality   (see  notes  each  section) 123 

Construction  of  laws 119 

Contract  note.    See  Broker's  note  of  sale. 

Schedule  A    86 

Conveyance,  tax  on  86,  100 

Schedule  A  86 


170  INDEX. 

(References  are  to  Pages.) 

Ck)-operative  B.  &  L.  securities  exempt 69 

Cordials.     See  Liqueurs;  Wines. 

tax  on    4 

Corporation  excise  tax   xxvi 

Cosmetics  and  perfumery,  Schedule  B 106,  108 

Cosmetics,  etc.,  failure  to  stamp 71 

Cosmetics,  etc.,  monthly  declaration 75 

Cosmetics,  etc.,  removal  of  stamps 73 

Cosmetics,  etc.,  removal  of,  unstamped 74 

Cosmetics.     See  Merchandise;  Perfumery. 

Counterfeiting  and  forgery  of  stamps 50,  52 

Custom-house   broker,   special   tax 19 

defined 19 

notes 36 

Custom-house,  entry,  for  consumption.  Schedule  A 86 

withdrawal  from  bond  87 


D. 


Debt,  instruments  securing,  exempt.  Schedule  A 86 

Deed,  tax  on 86,  100 

Schedule  A    86 

Default  of  stamps.     See  Omission. 

Dentifrices,  Schedule  B  106 

Department  rulings.     See  Administrative. 

Discount  on  stamps  sold 79 

Distilled   spirits    xxiv 

Documentary  stamp  taxes   80 

Drawback  on  exports   107,  110 

on  wine  exported  12 

abatement  on  recovered  spirits 13 

exemption  of  exported  cosmetics,  etc 74 

on  exported  perfumery,  etc 107 

Dutch  origin  of  excise  taxes ix 


INDEX.  171 

(References   are  to  Pages.) 

E. 

Effect,  Act  to  take 124 

Emergency   taxes,  use  of vii 

may  be  extended  on  expiration xi,  125 

Encumbrances,  not  included  in  deed  tax,  Schedule  A 86 

Enforcement  of  tax  laws Ill 

Entertainment.     See  Exhibition. 

Entry,  custom-house,  for  consumption.  Schedule  A 86 

withdrawal  from  bond  87 

bonded  warehouse.  Schedule  A 87 

Estoppel,  none  based  on  rulings   -••.. ;-"-' xiv,  115 

Exchange,  produce,  sales  on 81,  91 

Excise,  opposition  to,  reasons  for vii 

Exempt,  actual  deliveries  of  mdse 82,  91 

agricultural  fairs,  etc 21 

collateral  stocks.  ...  80 

insurance,  certain  kinds 87,  88,  102 

government  instruments.  .   69 

lyceum  lectures,  etc 21 

mutual   associations.   .  .    69 

newspapers  within  county.  .    84,  94 

telegraph  and  telephone  service,  certain 85 

tickets,  foreign   passage  certain 88,  104 

Exhibition  proprietor  or  agent,  special  tax 21 

taxed  in  every  state.  .   21 

certain  exemptions.   .  .    21 

notes.   .   .   .    37 

Exportation  of  taxable  mdse.   74 

Exports,  drawback  on  certain 107,  110 

Express   and   freight  tax  on 83,    93 

Schedule  A.  .  .   83 


Factor.     See  Commercial  Broker;  see  Commission  Merchant. 
Failure  to  Stamp.    See  Omission. 
Fairs.    See  Exhibitions. 


172  INDEX. 

(References  are  to  Pages.) 

Fermented  liquors.  .  .   xxiv,  1,  5 

See  Beer. 

Flour,  mixed xxt 

Foreign  securities  taxed 65 

Forfeiture.    See  Collection;  Penalties. 

of  unstamped  wines,  etc.   6 

Fortification  of  sweet  wines.  6- 

notes  on 16 

for  exportation.  .  .    11 

for  making  cordials,  liqueurs,  etc 15 

Fortified  "Wines.    See  Wines,  etc. 

Freight  and  express,  tax  on 83,  93 

Schedule   A 83 

6. 

Governmental  instrumentalities  exempt.    69 

Government  securities,  etc.,  exempt 69 

Grape  brandy.     See  Wine  Spirits. 

tax  increased 6,  12,  13 

defined.  .  .  .   7 


H. 

Hair  preparations.  Schedule  B 106^ 

Hall.    See  Theatre. 

Hawaii.  .  .  .   xxviii,  127 

Holland,  origin  of  stamp  laws  in x 


I. 

Imported  articles  pay  duty  and  tax 77 

Income  tax xxvii 

Indemnity  bonds,  tax   on 85,    96 

Indictment.    See  Collection;  Penalties. 

Intent  to   evade  law.    58,     62 

Inheritance  Tax.    See  Legacy. 


INDEX.  173 

(References  are  to  Pages.) 

Injunction   against  tax,  impossible.    xii,  xiil 

Insular  possessions.  .  .    xxvili,  126 

Insurance,  all  kinds,  except 87,  102 

kinds  exempted 87,  102 

marine,   inland,   fire,  fidelity,  guaranty,   liability,  glass, 
boiler,    burglary,    elevator,    sprinkler,    rents,    profits, 

bond,  title,  credits,  Schedule  A 87 

certain  forms  exempted,  life,  accident,  health,  workmen's 

and  co-operative  fire.  Schedule  A.  • .  < 87 

Internal  Revenue  Laws.   xv,  xxi,  xxiii 

classification   of.   .   .    xxii 

construction  of xxii,  119 

general,  other   than   war   tax xxi 

miscellaneous xxviii 

war  tax  of  1898,  cf.  each  section. 

Internal  Revenue  System  of  U.  S xxi,  xxiii 

War  Revenue  Act,   relation  to x,  xxi 

table  of  statutes,  1791-1913.   xv 


L. 

Leases,    not   taxed.    .    101 

Legacy  tax xxv,  118 

License  taxes,  origin  of.  .  •. 22 

License  Tax.    See  Special  Tax. 

Liens,  not  included  in  deed  tax.  Schedule  A 86 

Litigation,  amount  of  on  tax  questions : iii,  xll 

Liqueurs.    See  Wines. 

tax  on 4 

from  fortified  wines.  .  .  15 

Local  government  securities  exempt 69 

Lyceums.     See  Exhibitions. 


M. 

Manufacturer  of  cigars,  special  tax 41 

notes 43 

Manufacturer  of  cigarettes,  special  tax 42 


174  INDEX. 

(References  are  to  Pages.) 

Manufacturer  of  perfumery,  etc 71,  75 

to  make  monthly  declaration 75 

Manufacturer  of  tobacco,  special  tax 40 

notes 43 

single  tax  on  maker  various  kinds 42 

Marine  certificates.  .  .  86,  98 

Merchandise,  exportation  of  taxable 74 

Merchandise  imported,  taxable 77 

Merchandise,  removal  of  unstamped 74 

Merchandise,  sales  of  on  exchange 81,  91 

Merchandise  stamps,  omission  of 71 

Merchandise  stamps,  removal  of  73 

Merchandise  taxed 106,  108 

Merchant.     See  Commission  Merchant. 

Mortgage  lien,  not  included  in  deed  tax,  Schedule  A 86 

Mortgages,  not  taxed.   .    68,  86 

Schedule  A 86 

Municipal  securities  exempt.  .   69 

Museum.     See  Theatre. 

Mutual  associations,  certain  exempt.   69 


N. 

Newspapers,  shipments  of.  .   83,  93 

Notes,  promissory,  tax  on 83,  92 

Schedule  A.  .  .  . 83 


0. 

Occupation'  tax.    See  Special  Tax, 

Oleomargarine xxlv 

Omission   of   mdse.    stamps.    71 

Omission  of  stamp,  effect  on  paper 58,  60,     64 

Omission  of  documentary  stamp,  penalty 49 

Omission  of  stamp,  correcting   58,     60 

Opium xxiv 

Palace  or  parlor  car  seat.  Schedule  A 89 


INDEX.  175 

(References  are  to  Pages.) 

P. 

Panama  canal  zone 26 

Parlor  car  ticket 89,  105 

Partnership 26,   33,  116 

Passage  tickets  foreign.  .  .  88,  103 

Pawnbroker,  special  tax.  .   19 

defined 19 

notes 33 

Penalties   generally.  .  .   114 

See  separate  titles. 

Penalty,  for  evading  any  tax.   Ill 

double  tax  for  evasion Ill 

Penalty  for  failure  to  stamp 55,  58,  60 

Penalty  for  omission  to  stamp  remission  of 59 

See  several  objects. 

Penalty  for  unlawful  use  of  wine  spirits 15 

Pension,  etc.,  papers  exempt.  Schedule  A 89 

Perfumery.     See  Merchandise. 

Perfumery  and  cosmetics.  Schedule  B 106,  108 

Perfumery,  etc.,  failure  to  stamp 71 

Perfumery,   etc.,  monthly   declaration 75 

Perfumery,  etc.,  removal  of  stamps.   73 

Perfumery,  etc.,  removal  of,  unstamped 74 

penalty  for  failure  or  falsity  of  declaration 76 

tax,   when   in   effect 77,  107 

manufacturer   defined.   .   .    77 

imported   goods   included.  .    77 

imported  goods,  how  taxed.  .  77 

when  to  be  stamped.   107 

drawback  on  exports 107 

Philippines xxviii,  127 

Playing  cards.  .  .  .  '. xxvi 

Pledge  of  stock,  exempt.  Schedule  A. 80 

Pool.     See  Bowling. 
Pool  Room.    See  Billiard. 

Port  certificates,  Schedule  A 86 

Porter.    See  Beer. 


176  INDEX. 

(References  are  to  Pages.) 

Porto  Rico xxviii,  126 

Post-stamping  of  papers.  .  .  58,  61 

Power  of  attorney,  any  kind.  Schedule  A 88,  104 

Profits,  corporate  interest  in.  Schedule  A 85 

Promissory  note,  omitting  stamp 55 

Promissory  notes,  tax  on.   83,  92 

Schedule  A. j  83 

Protest,  Schedule  A 89 

Protest  against  tax 117 

Protest  of  note,  bill,   etc. 89,  104 

Proxy,  for  company  meeting.   88 

Schedule  A 88 

Public  Exhibition.    See  Exhibition. 


Rebate.    See  Drawback. 

Record,  unstamped  papers  forbidden 64 

unlawful  to,  unless  stamped.  .  67 

Records  and  reports,  wine  producers 9 

Records  to  be  kept  by  persons  liable 110 

Recovery  of  tax  paid.  .  .   , 117 

Rectifiers xxiii 

of  cordials,  etc 5,  15 

Redemption  of  unused  stamps 124 

Refund.     See  Drawback. 

Registration  unlawful  unless  stamped. 67 

Regulations  as  to  wines,  etc.  6 

Removal,  misuse  of  mdse.  stamps 73 

Removal  of  unstamped  mdse.  74 

Repeal  of  tax  law,  effect  of 125 

Returns  or  reports  to  be  made  by  persons  liable 110 

s. 

Sale,  broker's  note  of.  Schedule  A 86 

Sale  agreement,  Schedule  A 81 

Sale  on  board,  memo,  required.  Schedule  A 82 


INDEX.  177 

(References  are  to  Pages.) 

Sale  of  mdse.  on  exchange  for  actual  delivery  exempt 82 

Sale  of  mdse.  on  exchange,  memo,  required 82 

Sale  of  products  on  exchange 81,    91 

Sale,  etc.,  of  stock,  taxed 80,     89' 

Schedule  A,  stamps  on  documents 80 

Schedule  B,  perfumery,   etc 106,  108 

tax  on  mdse 106 

Seat  in  parlor  car,  Schedule  A 89 

Securities,   foreign    taxed 65 

Securities,  etc..  of  domestic  governments  exempt 69 

Show.     See  Exhibition. 

Skin   preparations.   Schedule   B 106 

Sleeping  car  berth  89,  105 

Special  taxes.  See  Bankers;  Billiards;  Bowling;  Brokers; 
Circuses;  Commercial  Brokers;  Commission  Merchants; 
Custom-house  Brokers;  Exhibitions;  Pawnbrokers;  The- 
atres ;  Tobacco. 

Special  taxes,  in  general 18-22 

when    imposed    18 

notes 22 

Special  taxes,  other  than  war  revenue xxiii,  22 

Special  taxes,  penalties    43,  45 

Special  taxes,  pro  rata  for  1916 43 

Special  taxes,  tobacco,  etc.,  text 39 

notes 43 

Stamp  laws  same  for  Schedules  A  and  B 71 

Stamp  taxes  imposed 46 

when    imposed    46 

on  what  securities  and  documents 46 

Schedule  A    80 

on  merchandise,   perfumery,  etc 46 

Schedule  B    106 

penalty  for  omitting  stamp 49 

penalty  for  forging,  counterfeiting,  etc 50 

cancellation  of  stamps  53 

penalty  for  failure 53 

on  promissory  note ;    penalty 55 

powers  and  duties  of  officials 66 

distribution  and  sale   56 


178  INDEX. 

(References  are  to  Pages.) 

Stamp  taxes  imposed  —  Continued. 

omission  with  intent,  penalty 58 

post-stamping  under  penalty    58 

remission  of  penalty 59 

post-stamping  of  copy  60 

unstamped  instrument  cannot  be  recorded 64 

foreign  securities  taxed   65 

recording  and  registering  of  unstamped  paper  unlawful.  67 

validity  of  paper  not  lost  for  want  of  particular  stamp.  68 

government  securities,  U.  S.,  State,  local,  exempt 69 

governmental  instrumentalities  exempt   69 

co-operative  association  securities  exempt 69 

building  and  loan  associations  exempt 69 

stamp  law,  all  apply  to  all  papers  and  things 71 

perfumery,  cosmetics,  etc.,  penalty  for  omitting  stamps.  71 
perfumery,  cosmetics,  etc.,  penalty  for  removing  stamps.  73 
perfumery,  cosmetics,  etc.,  concealing  or  removing  un- 
stamped goods    74 

perfumery,    cosmetics,    etc.,    for    export,    exempt    under 

regulation 74 

Stamp  taxes,  general  imposition  of 46 

laws  applicable  for  collecting 110 

records  to  be  kept  and  returns  made  by  person  liable. .  110 

penalty   for   evasion.    Ill 

Stamp  tax,  in  Holland  and  England x 

Stamp  tax  on  perfume,  cosmetics,  etc 71 

Stamps,  cancellation  of  53,  54,  78 

Stamps,   distribution  of,  officially 56 

Stamps,  exchange  of  old  rate  for  new 2 

Stamps  for  wines,  etc 5 

Stamps,  forgery  and  counterfeiting  of 50,  52 

Stamps,  omission  of,  penalty  for 49 

Stamps,  official  preparation  of 78 

Stamps,  omission  from  promissory  note 55,  58 

Stamps,  payment  of  taxes  by 46 

Stamps,  preparation,  distribution,  sale 78 

Stamps,  sale  of  57,  79 

Stamps,  sale  at  discount 79 


INDEX.  179 

(References  are  to  Pages.) 

Stamp  taxes,  Schedule  A. 

on  securities  and  documents 80 

when  in  efifect   80 

see  under  various  names. 
Stamps,  unused,  to  be  redeemed 124 

when  taxes  cease 124 

Stamps,  use  of  old  former  tax 2 

State  and  local  government  functions  exempt 69 

Statutes  amended 2,  6  et  seq. 

Statutes,   construction   of 119 

Statutes,  other  made  applicable 110,  111 

Statutes,  Table  of  Revenue xv 

Still  wines.     See  Wines. 

Stills,  makers  of  xxiil 

Stock  broker  liable  for  stamp  omission 81,    90 

Stock  broker,  special  tax 19 

notes 30 

Sto.ck,  deposited  as  collateral,  exempt 80,     89 

Stock,  issue  of,  taxed 80,     89 

Stock,  sales,  etc.,  of,  taxed 80,    89 

how  taxed.  Schedule  A 80 

Succession  tax.     See  Legacy. 

Suit  by  government.     See  Collection. 

Sweet  wine,  producer,  use  of  wine  spirits  by 7 


T. 

Tax.     See  the  separate  titles. 

Tax  cannot  be  enjoined xii,  xiii 

Taxes,  collection  of  Ill 

Taxes  in  effect,  when 124,  125 

all  under  Act,  except  beer,  to  cease,  when 124,  125 

Taxes,  rates  of.     See  Table  end  of  book,  various  titles. 

Taxes,  recovery  of,  wrongfully  collected 117 

Telegraph  and  telephone,  official  service  exempt 85 

Telegraph  and  telephone,  tax  on 84,     95 

company  to  make  monthly  report 84 

tax  on  messages  costing  15c 84 


180  INDEX. 

(References  are  to  Pages.) 

Telegraph  and  telephone,  tax  on  —  Continued. 

company  to  pay  the  tax 85 

company  to  collect  from  person  paying  for  message ....  84 

company  service  exempt    85 

government  service   exempt    85 

Telephone  and  telegraph,  tax  on 84,  95 

See  Telegraph. 

Theatre,  proprietor  of,  special  tax 20 

according  to  seating  capacity 20 

theatre  defined   20 

theatre  under  lease  20 

certain  halls  excepted   20 

notes 36 

Tickets,  foreign  passage   88,  103 

parlor  car,  or  sleeper ^ 89,  105 

Tobacco  and  snuff .-^ xxiv^ 

Tobacco  dealers  and  manufacturers,  special  tax 39 

when  imposed.  .  .   39 

on  basis  of  annual  sales  or  transfers 39 

dealers  classified.  .  .    39 

every  separate  store  taxed.  .  40 

manufacturers  classified,  tobacco  40 

manufacturers  classified,  cigars.   41 

manufacturers   classified,  cigarettes.    42 

single  tax  for  manufacturers  in  all  classes 42 

notes 43 

dealers  in  leaf   39 

in  any  form  of  tobacco.  .   40 

Tobacco  growers  not  manufacturers 44 

Tobacco  manufacturers,  special  tax.  40 

notes i 43 

Toilet  preparation.  Schedule  B 106 

Transportation,  tax  on  shipments,  Schedule  A 83 

bill  of  lading  obligatory.    83 

shipper  must  stamp  bill  of  lading. 83 

newspapers  pay  on  monthly  report 83 

newspapers  exempt  in  county.  .  84- 

Treasury  decisions.    See  Admin.  Rulings. 


INDEX.  181 

(References  are  to  Pages.) 

V. 

Validity  of  paper,  effect  on  of  not  stamping 61 

not  affected  by  wrong  stamp 68 

Vaseline,   Schedule  B 106 


w. 

War  Revenue  Act,  text 1-124 

War  tax,  not  technical  name  of  Act vil 

War  tax  of  1898,  Cf.  notes  to  each  section. 

Warehouse  beer,  how  taxed 2 

Warehouse,  bonded  customs,  entry.  Schedule  A 87 

Warehouse  receipts,  not  taxed.    104 

Wilson,  Woodrow,  quoted  on  taxes.   ix 

Wines,  liquors,  etc.,  tax,  who  to  affix  stamps 5 

Wines,  taxes  on.  .  .    4 

eligible  for  fortification.  .    "     8 

fortified,  under  regulations 6 

fortified,  used  for  liqueurs,  etc 15 

gangers 14 

still  tax  on.  .  .   4 

tax  not  required  on  taxed  liqueurs 5 

tax  paid  by  stamps 5 

wine  taxes,  notes  on.  .   16 

Wine  spirits  for  fortifying,  tax  on 6 

for  fortifying  regulated.  .  .   7 

fortified,  forfeited  for  excess  alcohol 7 

fortified,  for  exportation 11 

defined.  .  .  .   7 

laws  amended 6,  14 

notes  on 16 

penalty   for   unlawful   use 15 

recovery  of,  in  process.  .  13 

refund  of  tax  on.  .   12,  13 

redistillation.    .    . 13 

tax  increased 6,  12,  13 

[Total  Number  of  Pages  209.] 


A  TREATISE  UPON  THE 

Income  Tax  Law 

By  THOMAS  G.  FROST 

of  the  New  York  Bar,  Author  of  a  treatise  on  the 

Federal  Corporation  Tax   Law  and  well 

known  as  a  writer  and  authority  on 

Corporation  Law. 

It  is  an  exhaustive  and  practical  work  on  the 

Income  Tax  Law  and  gives  also  the  full  text 

of  the  law.    Every  section  of  the  Income  Tax 

Law  has  received  careful  treatment. 

Attention  is  called  therein  not  only  to  de- 
cisions of  the  courts  having  a  bearing  upon  the 
interpretation  of  the  Act,  but  in  addition  refer- 
ences are  made  to  rulings  of  the  Treasury  De- 
partment rendered  in  connection  with  previous 
Income  Tax  Acts,  together  with  reference  to 
the  opinions  of  the  Attorney  Generals  of  the 
United  States,  and  to  decisions  of  the  English 
Courts  upon  existing  provisions  of  the  English 
Income  Tax  Laws  which  are  similar  or  closely 
analagous  to  the  Federal  Income  Tax  Law  of 
1913. 

It  gives  a  clear  and  helpful  explanation  of 
the  scope,  meaning  and  method  of  administra- 
tion of  the  Income  Tax  Law. 

One  Volume,  304  pages,  $2.50 

MATTHEW  BENDER  O  CO. 

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Corporation  Tax  Law 

MR.  THOMAS  G.  FROST  of  the  New  York  Bar,  author 
of  a  treatise  on  the  Federal  Income  Tax  and  well  known 
as  a  writer  of  text  books  on  Corporation  Law,  has  pre- 
pared an  exhaustive  work  on  the  Federal  Corporation  Tax 
Law. 

Among  the  many  topics  treated  are  the  following: 

NATURE  of  the  Federal  Corporation  Tax  Enactment. 

FULL  TEXT  OF  THE  DECISION  of  the  Uw  S.  Supreme 
Court  sustaining  the  constitutionality  of  the  Act. 

A  DISCUSSION  OF  THE  RULES  of  construction  and  In- 
terpretation,  showing  Scope  and  Intent  of  Act. 

TAX  RETURNS  fully  discussed  in  a  chapter. 

FUNDAMENTAL  basis  on  which  the  tax  is  laid,  correc- 
tion and  rcTision  of  returns. 

MODE  OF  ASSESSMENT  AND  COLLECTION  of  the  Tax, 
together  with  an  extended  consideration  of  the  subject- 
matter  of  Court  Procedure. 

IT  ALSO  GIVES  THE  FOLLOWING:  Full  text  of  the 
Act;  Treasury  regulations  relating  to  the  Collection  of  the 
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Forms  of  returns;  Sections  of  the  U.  S.  Reyised  Statutes 
applicable  to  the  collection  and  payment  of  the  Federal 
Corporation  Tax. 

Not  only  will  attorneys  but  business  men  and  gOTcrn- 
ment  employees  engaged  in  the  collection  of  the  Federal 
Corporation  Tax  find  this  book  of  great  value  and  help. 

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UNIVERSITV  OF  CALIFORNIA 

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